It’s possible that U.S. investors may not recognize the name James Anderson, but his background and investment accomplishments are beyond dispute. This renowned investor was a top stock picker at the Scottish investment firm Baillie Gifford for over 40 years. He led the Scottish Mortgage Investment Trust as its head for over two decades, accumulating returns of over 1,700% during his tenure.
Anderson built a reputation as a forward-thinker by investing in pioneering, rapidly-expanding businesses such as Netflix, Amazon, Tesla, and Nvidia (NVDA), resulting in significant returns for investors. With his track record of identifying successful ventures ahead of the curve, it would be prudent for investors to take his counsel into account.
The dawn of Artificial Intelligence (AI) is only just breaking, and if the trend in adoption persists, Nvidia’s market value could skyrocket up to an astonishing $50 trillion by 2035 – yes, you read that right! Now, while this may initially sound unbelievable, Anderson presents a persuasive case to back up his claim.
Cornering the market
Remarkable strides in artificial intelligence (AI) have significantly boosted Nvidia’s financial standing. Starting around late 2022, the introduction of generative AI, the company’s market value skyrocketed from $416 billion to an astounding $4.16 trillion (currently). A major factor in this dramatic rise was Nvidia’s graphics processing units (GPUs) being recognized as the premier option for AI computations.
The financial successes of the semiconductor company have contributed significantly to its remarkable ascent. After achieving two straight years of growth exceeding 100%, a natural deceleration took place; however, the present figures remain impressive. In the first quarter of fiscal year 2026 (ending on April 27), Nvidia recorded revenue that increased by 69% compared to the previous year, reaching an unprecedented $44.1 billion. Meanwhile, its adjusted earnings per share rose by 31%, amounting to $0.81.
In the latest quarter, Nvidia generated a staggering $44 billion in sales, which is more than double its total revenue of $27 billion for the entire fiscal year 2023.
The results are indeed remarkable, but they may only scratch the surface. A study by PricewaterhouseCoopers (PwC), one of the world’s leading accounting firms, predicts that AI could potentially boost the global economy by an astounding $15.7 trillion by 2030. The report further indicates that we are currently in the early stages of AI development. If Nvidia manages to tap even a fraction of this vast market potential, it would significantly increase its revenue and profitability.
According to Anderson’s estimation, the data center market, where most AI computations occur, expands approximately 60% each year. If this growth trend persists for the next ten years and Nvidia can sustain its profit margins, this could lead to EPS (Earnings Per Share) of $1,350 and free cash flow of around $1,000 per share. This, in turn, would value the stock at approximately $20,000 per share, giving the company a market capitalization of about $49 trillion.
Competitive advantages
Examining Anderson’s most successful investments can offer valuable insights. For instance, Amazon’s stock has skyrocketed 227,600% since its initial public offering (IPO), while Netflix and Tesla have both experienced dramatic growth at 105,000% and 20,020%, respectively. However, Anderson emphasizes that these impressive gains should not be compared directly because these companies didn’t initially start from positions of high profitability and dominance; instead, they had to achieve that status over time.
Nvidia ticks all the right boxes. Not only is the company extremely profitable, but it also reigns supreme as the undisputed leader in the data center GPU industry. With an impressive 92% market share, according to IoT Analytics, and its continuous exponential growth, competitive advantages in both hardware and software, and a culture and leadership that align with our preferences, Nvidia truly checks all the boxes we seek.
Plenty of things will have to go right
Clearly, despite all other aspects moving smoothly, there are numerous potential obstacles that might hinder Nvidia in reaching a market capitalization of $50 trillion.
It seems that AI integration is progressing, but there’s a chance it might not come to fruition as expected. Another company could develop a superior method for managing AI models, potentially outpacing Nvidia in the competition. Moreover, Nvidia may struggle to maintain its lead in the industry. Additionally, unforeseen events (referred to as “black swan” events) could disrupt growth. Tariffs might unexpectedly increase inflation and trigger a recession.
Without being overly cautious, it’s important to acknowledge that the global landscape is unpredictable, and various advancements, among numerous others not mentioned, might pose challenges for Nvidia as they aim for a valuation of $50 trillion.
A better question
Anderson swiftly clarified that his theoretical benchmark isn’t a prediction, but rather a “potential” if artificial intelligence proves beneficial for customers and Nvidia maintains its leading position. He further proposed that the chance of Nvidia reaching such heights is relatively small, estimating the possibility to be around 10% to 15%.
The long-term evolution of GPU application in AI, and beyond, holds significant value for us, as we’ve seen it progress from initial enthusiasm, periods of possible slowdowns, to its eventual reshaping of entire industries, according to Anderson.
Discussing its market value, it’s worth noting that Nvidia is presently being traded at approximately 29 times the projected earnings for the upcoming year. In all honesty, this valuation seems quite reasonable when considering the immense potential that lies ahead.
Instead of focusing on if Nvidia might reach a market cap of $50 trillion within the next decade, it’s more important to consider whether the company will persist with its history of innovation and discover novel applications for its technology. By doing so, they can leverage these lasting industry trends to their advantage. Given their past successes, I would confidently say that they will continue to innovate and capitalize on opportunities, making a strong “yes” my response.
That’s why Nvidia stock remains a buy.
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2025-07-22 10:31