Photo Credit:Philip Pacheco/Bloomberg
Eric Jackson, hedge fund manager at EMJ Capital, has made a bold prediction about Nvidia's future valuation. Jackson forecasts that thesemiconductor giant could reach a market capitalization of $6 trillion by the end of 2024, nearly doubling its current value of $3.2 trillion. This projection comes amidst Nvidia's extraordinary year-to-date growth of over 150%, positioning it as a frontrunner in the AI chip market.
Jackson's prediction stems from his belief in Nvidia's potential for continued growth, particularly in light of its upcoming Blackwell chip series and future Rubin chips. "I think what's going to happen in the second half of the year, as people start to see how well the Blackwellchips are selling, how good the gross margins are on those, and start thinking about what's to come with the Rubin chips around the corner, I think we'll start to see that euphoria reflected in a lofty go-forward price-earnings multiple," Jackson stated in a CNBC interview.
While Jackson's forecast may seem optimistic, it's important to note the varying perspectives within the financial community. Hans Mosesmann of Rosenblatt Securities, currently the most bullish analyst on Wall Street regarding Nvidia, has set a 12-month price target of $200 per share. This target, while ambitious, still falls short of Jackson's projection of $250 per share by year-end.
Contrasting these bullish views, Aswath Damodaran, a renowned NYU finance professor, estimated Nvidia's fair value at $68 per share in February, significantly below its current trading price. This discrepancy highlights the ongoing debate about Nvidia's true value and
future potential.
Nvidia's rise to prominence has been fueled by the growing demand for AI-capable chips, with the company reporting a 126% year-over-year increase in revenue for Q1 2024, totaling $7.19 billion. CEO Jensen Huang attributes this success to the company's focus on accelerated computing and generative AI, stating, "A trillion dollars of installed global data center infrastructure will transition from general purpose to accelerated computing as companies race to apply generative AI into every product, service and businessc process."
As the AI arms race continues to intensify, Nvidia's position as a key supplier of essential hardware places it at the forefront of this technological revolution. However, investors and analysts alike remain divided on whether the company's current valuation accurately reflects its future potential or if it's indicative of market euphoria.
Eric Jackson's $6 trillion prediction for Nvidia may seem ambitious, it underscores the transformative impact of AI on the tech industry and the market's evolving perception of companies at the forefront of this revolution. As 2024 unfolds, all eyes will be on Nvidia to see if it can meet, or perhaps even exceed, these lofty expectations.
