James Anderson may not be a household name, but there’s no denying that the legendary investor has made his mark. He spent more than two decades at Scottish asset manager Baillie Gifford, where he led the launch of the Scottish Mortgage Investment Trust, achieving 1,700% returns. He is now managing partner at Lingotto Investment Management.
He made a name for himself by spotting early and betting heavily on some of the tech sector’s most iconic companies, including Amazon, TeslaAnd Nvidia (NASDAQ: NVDA)among others. So when Anderson talks, investors would do well to listen.
Earlier this year, Anderson made a bold prediction, saying that if artificial intelligence (AI) adoption continues at its current pace, Nvidia could be worth as much as $50 trillion in ten years. While that may seem like a fantastic claim at first glance, he makes a compelling argument.
Let’s take a look at the factors that could drive Nvidia’s value to those unthinkable heights.
There’s no denying the impact AI has had on Nvidia’s fortunes in recent years, but it’s worth looking at recent history to provide some context. Over the past twelve months, the company’s market capitalization has risen from $1.2 trillion to $3.2 trillion (at time of writing) – increasing its value by $2 trillion. This all came about because the company’s most powerful graphics processing units (GPU) have become the gold standard for AI processing.
Nvidia’s results are phenomenal. It generated five straight quarters of triple-digit percentage growth before inevitably running into tough competition. Despite this, Nvidia still grew 94% year-over-year to $35 billion in the third quarter of 2025 (ending October 27). This resulted in diluted earnings per share (EPS) increasing 103% to $0.81.
Through the first nine months of the 2025 fiscal year (which ends at the end of January), Nvidia has generated $91 billion in revenue and is on track to surpass $129 billion for the year. A turnover of that magnitude would have been unthinkable just a few years ago.
For example, the $35 billion in revenue Nvidia generated in its most recent quarter easily exceeded the $27 billion in revenue it generated during the entire 2023 fiscal year.
Yet these huge gains could be just the beginning. The AI market could potentially be worth $15.7 trillion by 2030, according to analysts at PwC, who also noted that “AI is still in its very early stages.” If Nvidia captured just a small piece of that addressable market, sales and profits could continue to rise.
Anderson suggests that demand for AI chips used in data centers – where most AI processing takes place – is currently increasing at around 60% annually. Assuming this growth continues at the same pace and that Nvidia is able to maintain its profit margins over the next decade, in 20234, that would produce earnings per share of $1,350. At that point, Nvidia would be worth about $20,000 per share, which translates into a market cap of about $49 trillion, according to Anderson.
There’s no denying that Amazon and Tesla have both been extremely profitable investments. Amazon shares have risen 229,200% since the IPO, while Tesla has risen more than 27,000%. However, Anderson notes that these opportunities were different because these companies “didn’t start from highly profitable and dominant positions, but had to get there.”
Nvidia’s dominance is undeniable. It still has the largest share of the gaming chip market that started it all. In the third quarter of the calendar, Nvidia’s share of the desktop GPU market rose to 90% as its graphics cards remain the preferred choice for gamers everywhere.
Nvidia also dominates the data center space. The company had a 98% market share in data center GPUs in both 2022 and 2023. While most expect the stock price to moderate in 2024 due to increasing competition in the AI chip segment, it is still expected to be the undisputed market leader.
Market dominance aside, there are other reasons why Anderson is bullish on Nvidia. The company’s “continued exponential progress, competitive advantages in hardware and software, and culture and leadership are exactly what we are looking for,” he noted.
It’s worth crunching the numbers to see what it will take for Nvidia to reach a valuation of $50 trillion, as unlikely as that is. Nvidia currently has a market cap of roughly $3.2 trillion, so it would need a 1,458% share price gain to take its value to $50 trillion.
Wall Street expects Nvidia to generate revenue of roughly $129 billion in fiscal 2025, which equates to a price-to-sales ratio (P/S) of about 25. Assuming P/S remains constant, Nvidia should let its revenue grow to grow. to roughly $2 trillion per year to support a $50 trillion market cap. Wall Street predicts sales of $195 billion next year. Using that as a starting point, Nvidia would need to grow its revenue 35% annually through 2034 to generate $2 trillion in revenue. While that’s a high bar, it’s certainly possible.
Beyond the math, there’s a long list of potential issues that could derail Nvidia on its unlikely path to $50 trillion:
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There is no widespread adoption of AI.
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Significant competition arises, reducing Nvidia’s market share.
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Nvidia is once again facing innovation problems.
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A black swan event occurs.
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An economic deterioration is taking place.
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Disagreements or defections from suppliers hinder its production.
There are many more potential roadblocks, but you get the idea.
Anderson was very clear when he pointed out (emphasis added): “This is not a prediction, but a possibility if artificial intelligence works for customers and Nvidia’s lead is intact.” He further noted that the likelihood of the company reaching those lofty heights was (in his opinion) a fairly slim 10% to 15%.
Still, Anderson remains focused on the big picture. “It’s the long duration of development [GPU] use in AI – and not just AI – from excitement, through potential breaks, to transforming the industries that matter most to us,” said Anderson.
Then there’s the matter of Nvidia’s valuation, which is frankly complicated. It currently trades for 51 times earnings. That seems expensive at first glance, but lagging valuations rarely keep pace with high-growth stocks. For example, Nvidia’s average price-to-earnings ratio over the past decade is 59, which suggests the stock is now historically cheap. Furthermore, Nvidia also trades at around 29 times next year’s expected earnings, which is an attractive price considering the potential.
Asking whether Nvidia could reach $50 trillion may be the wrong question. Instead, investors should ask themselves whether they should invest in an industry leader with a long track record of innovation, driven by once-in-a-generation secular tailwinds, especially if they can buy the stock at a reasonable price buy.
Based on these criteria, Nvidia is definitely a buy.
Consider the following before buying shares in Nvidia:
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John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Danny Vena has positions in Amazon, Nvidia and Tesla. The Motley Fool holds and recommends positions in Amazon, Nvidia, and Tesla. The Motley Fool has a disclosure policy.
Meet the Supercharged Growth stock that’s one of this year’s biggest winners. The company could reach $50 trillion by 2034, according to a world-renowned analyst. Originally published by The Motley Fool
