Did you catch Nvidia’s (NVDA) earnings?
Sales doubled over the past year. Just look at Nvidia’s growth since the artificial intelligence (AI) boom kicked off.
This is the largest corporation in the world, worth $5 trillion, growing like a nimble startup!
Despite another blowout quarter proving just how strong AI demand is, many investors still call AI a bubble.
Nvidia trades at just 20X forward earnings: Its cheapest valuation since the AI revolution started in 2023, despite soaring 1,500% since ChatGPT launched.
Today, the GPUs are rented out the day they’re racked. Cloud giants fund the build from roughly 50% of their operating cash flow… the most profitable companies in history, paying cash.
Also, The rental price of GPUs is rising. Even chips several years old still earn more per year than they cost to buy. In 2002, used routers sold for pennies on the dollar.
Nvidia is chronically undervalued at today’s prices. Which is why I think…
- Nvidia will reach $10 trillion.
At today’s valuation, profits need to roughly double for Nvidia to get there. Given how fast its chips are selling, that’s easily achievable.
I understand the idea of a $10 trillion company might sound bubbly. But only because we have never seen one before. Maybe Nvidia will one day be worth $100 trillion. Who knows. One company will get there eventually.
For Nvidia to hit $10 trillion by 2028, profits need to roughly double from here.
Nvidia’s profits doubled in the last 12 months.
