For many investors, the most important question is how far Nvidia can go, or whether it can sustain its meteoric growth. Nick Griffin, chief investment officer of Munro Partners, has been investing in Nvidia since 2019, but even he is surprised by the stock’s sky-high rise so far. “I’ve never seen an earnings acceleration like this… It’s never happened before to a company of this size and it’s unprecedented,” he told CNBC’s “Street Signs Asia” on Tuesday. Nvidia on Its shares topped $1,000 for the first time after fiscal first-quarter earnings on Wednesday beat sales and earnings expectations driven by the artificial intelligence boom. The closing price on Friday was $1,064.69. Nvidia’s Outlook Griffin noted that industry forecasts show Nvidia will sell $100 billion in AI accelerators in the next 12 months. AI accelerators are processors designed to accelerate AI or machine learning applications. “So, hyperscalers, corporate sovereigns are buying $100 billion worth of equipment, so these people really believe that the product is going to be transformative. Otherwise, they wouldn’t have spent $100 billion and expected revenue to probably double in Sometime in the future,” he said. He added, “The simple way to think about this question is: Do you use these products every day? … Are you prepared to pay for them? The answer is we use them every day in our business.” Griffin said, He sees use cases in “many different verticals,” citing wrap-up meetings, security threat detection and cancer detection as examples. A “proper” artificial intelligence assistant on a smartphone is another possible use case. “So I could see thousands of applications here, many of which I might be paying for over the next three to five years, which means this investment is probably sustainable,” he said. But Griffin warned that the stock’s performance was “definitely not going to be linear” due to “over-excited” investors. “But … we’re in the first year of this investment. So there’s a reasonable argument to be made that this investment is going to be years from now. It’s not just a year of hype,” he said. “If Nvidia continues to grow at this rate, it will become the largest company in the world — we’ve been saying that for years, but we didn’t expect it to happen so soon,” he added. In addition, he said there is another benefit to owning the stock: “Nvidia is growing faster than all seven of the Big 7 companies, but its price-to-earnings ratio is about the same, about 30 times.” Nvidia is currently a subsidiary of Griffin’s Munro Global Growth The fund’s largest holding company. Through April 2024, the fund was up about 30% over the past year. Griffin also manages the Munro Global Concentrated Growth Fund and the Munro Global Growth Small and Mid-Cap Fund. He has managed funds for more than 15 years, focusing on growth stocks. Here are the buy ratings and average price targets analysts have given the stock, according to data from the London Stock Exchange.
