Nvidia’s (NASDAQ:NVDA) meteoric ascent in the AI domain is nothing short of extraordinary. The AI chipmaker has consistently outperformed expectations while shaping the cutting edge of the rapidly advancing AI revolution.
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Since ChatGPT’s game-changing debut in late 2022, Nvidia’s stock has soared by over 700%, propelling the company to surpass the three trillion-dollar market cap threshold last year.
But how much higher can Nvidia climb? One investor, known by the pseudonym Wise Bull, has a bold prediction.
“Nvidia Corporation is poised to be the first company to reach a $10 trillion market cap due to its dominant position in GPU technology in the ever-increasing need for computing power,” the investor opined.
Wise Bull firmly believes that demand for NVDA’s wares will only increase as the years go by. The need for computing power will continue to grow, while hyperscalers will consistently pour money into the AI arms race.
On that note, Wise Bull dismisses the noise that these hyperscalers could perform this work internally (and thereby cut into NVDA’s profits), as chipmaking is just not their forte.
“Simply put this way, they are not in the chip/GPU business, it would only take Nvidia-like companies to make the next-generation GPU ‘product,’” adds the investor.
Wise Bull also downplays the threat of competition, pointing to Nvidia’s significant software advantage through CUDA, which provides a critical edge that competitors have yet to rival.
As for the concerns that the valuation is overextended, Wise Bull is happy to “debunk” these worries as well. Wise Bull points out how future revenue estimates are actually quite conservative compared to the massive opportunities awaiting the AI chipmaker.
In fact, the investor argues that Nvidia’s valuation is a bargain. The company’s 1.22 PEG ratio is 34% lower than the sector median, underscoring its relative undervaluation.
“GPUs are the current main AI play in town, and Nvidia has a demanding 90% market and likely unshakable in the coming decade,” concludes Wise Bull, who rates NVDA a Strong Buy. (To watch Wise Bull’s track record, click here)
One won’t find too many naysayers over on Wall Street, either. With 37 Buy and 3 Hold recommendations, NVDA boasts a Strong Buy consensus rating. Its 12-month average price target of $177.03 implies ~26% gains over the next year. (See NVDA stock forecast)
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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
