The name James Anderson may not be immediately recognizable to US investors, but his name will undoubtedly go down in the annals of legendary investors. He became well-known at Scottish investment management firm Baillie Gifford during his nearly 40-year career. Anderson made his mark running the leading Scottish Mortgage Investment Trust for over two decades, achieving returns of over 1,700% during his tenure.
Anderson secured his place in history by realizing the potential of numerous new technology companies that went on to become household names. These included netflix, Alibaba’s, Amazon, Tesla’sAnd Nvidia (NASDAQ:NVDA). Recognizing these explosive growth opportunities helped Anderson generate significant profits. Given his credentials and track record, investors would do well to heed his advice.
It’s still early days artificial intelligence (AI)according to most experts. Anderson predicts (not a typo) that Nvidia’s market cap could rise to $50 trillion in the next decade if AI adoption continues at its current pace. While this may seem counterintuitive, Anderson makes a compelling argument.
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Developments productive artificial intelligence and the rapid adoption of the technology since its introduction a few years ago has been an unexpected development for Nvidia. The company’s graphics processing units (GPUs) were adapted and quickly became the clear choice for processing artificial intelligence. The combination of strong demand and relentless innovation has made Nvidia the world’s largest publicly traded company, valued at $4.55 trillion (as of this writing).
Despite triple-digit, year-over-year revenue growth for two years in a row, Nvidia’s results remain strong. The chipmaker reported record revenue of $57 billion in the third quarter of fiscal 2026 (ended Oct. 26); This revenue increased 62% over last year, driving earnings per share (EPS) up 67% to $1.30. Nvidia anticipates growth to accelerate as it projects Q4 revenue of $65 billion, representing 84% growth. But much more may come.
Anderson predicts that the data center market is poised to grow 60% annually, driven by demand for artificial intelligence. Assuming Nvidia maintains its current profit margin and AI adoption continues at the same pace over the next decade, Nvidia could generate free cash flow of $135 per share and $100 per share, according to Anderson’s calculations. Using a 5 percent free cash flow yield, the stock price could rise to roughly $2,000 per share, pushing Nvidia’s market value to nearly $49 trillion in 10 years.
Nvidia continues to dominate data center GPU with a stunning 92% share of the market, according to IoT Analytics. Anderson also said the company’s “continued exponential growth, competitive advantages in hardware and software, and culture and leadership are exactly what we were looking for.”
Given the number of variables in this equation, there are a lot of things that could go wrong and prevent Nvidia from accomplishing this Herculean task. Fears of an AI bubble may prove true, a competitor may develop a better alternative, or AI may fail to achieve mass adoption. These are just a few of the obstacles that could derail Nvidia’s progress.
Anderson admits this is a guess, not a guess. possibility “If AI works for customers and Nvidia’s leadership is solid,” he admits there’s actually a 10% to 15% chance of that happening.
However, investors should not miss the big picture. “For a long time in its development [GPU] From excitement to potential disruption to the transformation of the industries that matter most to us, the use of AI is widespread, not just in AI, Anderson said.
Given the probability, it’s not unreasonable to assume Nvidia shares will be much higher in the coming years. Moreover, trading at just 24 times next year’s expected earnings, I think that’s a compelling price to pay for a company with this much potential.
Perhaps more importantly for investors, Nvidia doesn’t need to reach $50 trillion in the next 10 years to be a market-beating investment. Even if Anderson’s hypothesis is directionally correct, Nvidia shareholders will likely still do extremely well.
That’s why I believe Nvidia shares will be a buy whether it has a $50 trillion market cap or not.
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Danny Vena, Certified Public Accountant He has positions in Amazon, Netflix, Nvidia and Tesla. The Motley Fool has positions in and recommends Amazon, Netflix, Nvidia and Tesla. The Motley Fool recommends Alibaba Group. The Motley Fool has a feature disclosure policy.
