NVIDIA, the company behind the most powerful chips used to enable artificial intelligence, could see its stock price increase fivefold within the next decade, according to investor and fund manager Philip Lippman. It is said that there is Since ChatGPT’s announcement, the Silicon Valley-based company’s stock price has doubled since the beginning of the year on positive investor sentiment for AI. Despite the rally, the stock is still down 12% from its all-time high set on Nov. 29, 2021, according to FactSet data. Plus, the stock price he halved in 2022. NVDA 5Y Mountain Investor enthusiasm for Nvidia centers on its business model of selling high-performance graphics processing units (GPUs) essential to running the complex algorithms behind artificial intelligence technology. Demand for GPUs is skyrocketing as AI becomes more important across industries. Lippmann, who has managed the $1 billion Norwegian Storebrand Global Solutions Sustainable Fund since 2015, says investors are asking what automation can do and how it will impact different industries. The AI-driven trends that are driving the market are still developing, as we are still beginning to understand what it is giving us. The fund manager said AI companies using Nvidia chips could grow and disrupt other areas such as energy production, digital and financial services. Lippmann also pointed to the Cambridge-1 supercomputer used by pharmaceutical companies for research as an example of Nvidia’s ties to the healthcare sector. “I think the opportunities are really endless,” Lippman said on CNBC’s Pro Talk. Time will tell if they can capitalize on those opportunities. “But I think Nvidia has a great track record to prove it can be done.” Lippmann added that market size and demand could see a scenario where Nvidia grows fivefold. “At the end of the day, I think we are just scratching the surface of what AI can be like,” he added. Nvidia holds more than 4% of Lippmann’s fund, worth about $40 million, and is among the company’s top five holdings as of April 30. The size of the AI market is AMD, Intel, Amazon, and Google. But Bank of America analysts say NVIDIA has built a moat around its business and is unlikely to be disrupted anytime soon. “Competitors are not new, but the growing interest in generative AI and the lack of one of his NVDA products (H100) in particular have intensified the noise in the media,” said BofA analyst Vivek Arya. said in his May 10 customer memo. AI requires full-stack computing and scale/experience across existing scale of silicon, software, application libraries, developers, and enterprise and public clouds. However, Lippmann acknowledged that NVIDIA’s potential upside comes with certain risks. The fund manager said geopolitical tensions between China and Taiwan have caused some investors, such as Warren Buffett, to withdraw from Taiwan Semiconductor Manufacturing Company (TSMC) over concerns of instability. I pointed out that TSMC manufactures chips in Taiwan designed by Nvidia in the US.
