Nvidia Could Be the First $22 Trillion Stock, According to 1 Top Analyst. But There's a Big Catch.
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According to UBS' HOLT model, Nvidia's valuation could be as high as $22 trillion based on its cash flow return on investment. However, this estimate assumes that Nvidia's growth won't be negatively impacted by competition anytime soon, which may not be a safe assumption.
Nvidia's market cap has grown significantly over the past five years, reaching almost $4.6 trillion. UBS' HOLT model estimates the company's valuation at $22 trillion. The model uses cash flow return on investment and asset growth to determine valuation. Nvidia's cash flow return on investment is 73%, ranking it in the top 0.1% of companies tracked by HOLT. However, the model's estimate assumes that competition won't impact Nvidia's growth, which is a big catch. Amazon CEO Andy Jassy thinks a new shift has started that could reduce dependence on Nvidia's AI chips.
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