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So far, that thesis has been playing out just fine. Nvidia’s revenue and profits have surged alongside the AI buildout, while the company’s market value has climbed to unprecedented heights.
There are precious few willing to bet against the continued growth of AI or Nvidia’s dominance within the ecosystem. However, some skeptics argue that the assumptions underpinning the company’s valuation deserve closer scrutiny.
One of them is the investor known by the pseudonym Ten Cent Capital (TCC), who has a bone to pick with some of the central beliefs supporting the Nvidia investment thesis.
“A $5 trillion market cap on the chip suppliers requires the world to actually have the power, the capital, and the independent demand to support consensus assumptions,” the investor noted, arguing that the electrical grid remains constrained, capital spending is being financed by Nvidia itself, and demand is becoming more dependent on pre-funded commitments rather than organic end-market adoption.
