Nvidia
‘s
expected
free
cash
flow
over
the
next
two
years
highlights
the
immense
potential
of
the
AI
chip
maker,
according
to
one
chief
investment
officer.
Free
cash
flow
(FCF)
is
the
cash
a
company
generates
from
its
operations
after
accounting
for
capital
expenditures.
It
represents
the
money
available
for
the
company
to
distribute
to
shareholders,
pay
off
debt,
or
reinvest
in
the
business
—
all
of
which
typically
help
lift
share
prices.
“The
stat
that
really
blew
my
mind
is
that
the
forecast
cash
flow
for
Nvidia
for
2026
is
higher
than
Microsoft
,”
Yuri
Khodjamirian,
CIO
at
Tema
ETFs,
told
CNBC’s
Squawk
Box
Europe,
emphasizing
the
remarkable
growth
trajectory
of
Nvidia.
FactSet
data
shows
that
Wall
Street
analysts
expect
Nvidia’s
FCF
to
rise
to
$78.7
billion
and
$91.1
billion
in
the
2025
and
2026
financial
years,
surpassing
Microsoft’s
–
currently
the
world’s
most
valuable
company.
This
projection
is
driven
by
the
surging
demand
for
Nvidia’s
AI
chips,
as
software
companies
increasingly
rely
on
these
powerful
processors
to
fuel
their
artificial
intelligence
models.
The
spending
by
software
giants
such
as
Microsoft
,
Amazon
and
Google
is
propelling
the
share
prices
of
Nvidia
and
other
semiconductor
companies
to
new
heights.
For
the
first
time
last
week,
Nvidia’s
market
cap
topped
$3
trillion,
briefly
surpassing
Apple
to
become
the
second-largest
public
company
.
NVDA
1Y
line
Khodjamirian
noted
that
Nvidia
is
“setting
the
pace”
in
the
industry
with
annual
product
announcements
that
competitors
struggle
to
match.
“I
think
the
fundamentals
are
very
bright,”
Khodjamirian,
who
manages
Tema’s
Monopolies
and
Oligopolies
ETF
,
said.
However,
some
investors,
including
Khodjamirian,
suggest
that
revenue
potential
from
AI
software
—
Nvidia’s
customers
—
remains
uncertain,
which
might
cap
the
AI
stock’s
future
growth.
Dismissing
those
concerns,
Anthony
Ginsberg,
chief
executive
of
Gins
Global,
the
firm
behind
the
Tech
Megatrend
ETF
,
said
that
AI
is
accelerating
the
adoption
rates
of
cloud
services,
with
a
significant
portion
of
IT
spending
in
America
being
cloud-centric.
“If
you’re
a
CEO
and
don’t
have
an
AI
mission,
you’re
gonna
get
clobbered,”
Ginsberg
told
CNBC
Pro.
Ginsberg
predicts
that
Fortune
500
companies
will
increasingly
outsource
their
AI
and
algorithmic
business
to
cloud
service
providers,
benefiting
companies
like
Google
Cloud
and
Microsoft
Cloud.
“If
I
were
a
betting
guy,
I
wouldn’t
bet
against
Satya
Nadella.
So,
between
Microsoft
and
Google,
run
by
Sundar
Pichai,
I
would
say
they’re
going
to
keep
knocking
Amazon,”
Ginsberg
said,
suggesting
that
Microsoft
and
Google
are
well-positioned
to
gain
market
share
from
Amazon
in
the
cloud
space.
