AI is the most important tech advance in human history, and perhaps the greatest investment of all time. One only has to talk to the hundreds of millions of people who use it (or perhaps billions) and the army of companies around the world that say it will transform the way their employees work and pave a golden road to profits. It has also made untold numbers of people richer via ownership of its stock and the constellation of AI-related companies that surround it. Many of these have been helped by investments from Nvidia (NASDAQ: NVDA | NVDA Price Prediction), or loans that will make them grow faster. If AI is the world’s most important technology development, Nvidia sits in the middle of its future.
After dozens of deals, it has financial relationships and ownership in Anthropic, OpenAI, Intel (NASDAQ: INTC), Coreweave, Nokia, Synopsys (NASDAQ: SNPS), Marvell (NASDAQ: MRVL) and at least half a dozen others.
AI data centers are the heartbeat of AI’s future. Nvidia has just pulled off a coup as it set up a partnership with some of the world’s largest financial companies to set up a $500 billion facility to build out more of this infrastructure. The group includes Apollo, BlackRock, Blackstone, Goldman Sachs (NYSE: GS) and several smaller companies. Goldman Sachs is the world’s premier investment bank. BlackRock is the world’s largest money manager. And Nvidia will backstop some of the deal, just in case other investors fall short. As Bloomberg reports, “Executives indicated that it will focus on debt financing to provide access to computers for Nvidia’s largest customers and that there are already many deals in the works that would qualify toward this commitment.” This means that much of this money will return to Nvidia as revenue, which is central to many of its other investments. “Round-tripping” of revenue or not, it helps to guarantee Nvidia’s 60%-plus top-line quarterly growth.
Nvidia has a path toward being the world’s largest company by revenue. In its most recent quarter, it had revenue of $81 billion, which grew 85% year over year. That means Nvidia’s revenue run rate is close to $330 billion. And, it said in the current quarter, revenue will be $91 billion. In the upcoming fiscal year, at its current growth rate, its revenue could be $630 billion. Amazon topped the Fortune 500 based on revenue at $714 billion, but its growth rate is 19%. Give Nvidia two or three years, and it could sit atop the Fortune list.
The business world has never seen a company like Nvidia. One could argue that Microsoft was more important in the late 20th century and the beginning of this one. The operating system sector has faded. Google’s search business was a huge step forward, but Nvidia has largely replaced it. Apple is built on one product.
Nvidia’s market cap is $5.4 trillion. That is based on its role as the arms merchant to the AI industry. As it provides money for core assets like data centers, that role grows. It grows more and it becomes the AI sector’s banker.
Despite a bit of sideways movement, recently Nvidia’s stock is up 977% in the last five years. To reach a market cap of $10 trillion, it does not have to come close to that pace.
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