There is simply no bigger market story at this time than NVIDIA. It reminds me of Tesla when I first started covering the stock in detail, after its IPO, and into its first short squeeze. These kinds of events are rare in markets, so pay attention.
The famed investor, Tom Lee, recently opined that NVIDIA has such a large head start compared to everyone else, that based on his valuation models, he could see NVIDIA climbing to a $10 trillion market cap in due course.
I was pretty stunned to hear that.
$10 trillion?
The thing is, we say that for every round number, and the way our current economic system is set up, growth is the goal above all else. I remember just 10 years ago when people thought a $1 trillion company would be impossible. Now, we have $3 trillion companies.
I’ve tried to figure out how or why NVIDIA could go to $10 trillion and the simple fact is as follows. Like, how could someone say something like this? I of course know all of the bearish cases – it’s a bubble, it’s euphoric, their sales aren’t sustainable, etc etc.
What are the immediate bull cases? Well, the deeper I go, the more interesting it gets:
They are in a position to commoditize everything in tech. In-fact, I was rather surprised to see the way they layed out their latest earnings report by each sector. I believe that still to this day very few people know that NVIDIA is in software, automotive, cloud gaming, and robotics. What’s next? Phones? Search engines?
I think it’s rather easy to be bearish on NVIDIA because of the euphoric nature of its rise, but I believe with a little critical thinking you’ll realize it probably makes far more sense to be bearish on Apple, Google, and Microsoft as NVIDIA is most likely going to turn all of their products into commoditized solutions that anyone can build with one of their chips.
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