As Nvidia Corp. (NASDAQ:NVDA) races past a record-breaking $5 trillion valuation, a remark from SoftBank Group (OTC:SFTBF) (OTC:SFTBY) CEO Masayoshi Son last year that the chipmaker was "undervalued" looks remarkably prescient.
Masayoshi Son's $9 Trillion AI Vision
Speaking with Bloomberg at the Future Investment Initiative conference in Saudi Arabia in October 2024, Son dismissed concerns about an AI bubble, arguing that Nvidia's market potential was still vastly underestimated.
Son said he thinks "Nvidia is undervalued" because the "future is much bigger" and that the chipmaker is just one example of it.
He went on to frame an expansive vision for the artificial intelligence economy, estimating that the rise of artificial superintelligence could require 400 gigawatts of data center power and as many as 200 million AI chips, representing a cumulative capital expenditure of $9 trillion.
"It’s too much investment for many people’s view. I say it’s still very reasonable. CapEx, $9 trillion is not too big, maybe too small," Son stated at the time.
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AI Investment, Not A Bubble
Son also addressed critics who warned of excessive hype surrounding generative AI and semiconductor stocks, but countered that even modest real-world productivity gains would justify massive AI investments.
He also projected that four major companies — the "new GAFA," a reference to Alphabet Inc.'s (NASDAQ:GOOG) (NASDAQ:GOOGL) Google, Apple Inc. (NASDAQ:AAPL), Meta Platforms, Inc.'s (NASDAQ:MET) Facebook and Amazon.com, Inc. (NASDAQ:AMZN) — could together earn $4 trillion in annual profit from the AI revolution.
When asked if SoftBank aimed to be one of them, he replied immediately, saying, "Of course."
Jensen Huang-Led Nvidia's Meteoric Rise
Fast forward to today, Nvidia — led by CEO Jensen Huang — has crossed the $5 trillion market capitalization mark, cementing its position as the most valuable semiconductor company in history.
The rally has been fueled by record demand for AI accelerators and data center chips powering large-scale models across tech giants like Microsoft Corporation (NASDAQ:MSFT), Meta and Google.
Analysts such as Dan Ives of Wedbush call this "the fuel for the AI revolution," while others, like Kevin Gordon at Schwab, caution that Nvidia's valuation now represents 16.5% of U.S. nominal GDP — far surpassing the dot-com era highs of Cisco.
Nvidia shares have climbed 49.58% year to date. According to Benzinga's Edge Stock Rankings, the stock shows strong Momentum, Growth and Quality, maintaining a positive price trend across short-, medium-, and long-term periods. Click here for a detailed look at how it stacks up against peers and competitors.
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Disclaimer: This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors.