Nvidia's Future Cash Flow Could Surpass Microsoft's, Investor Says: 'Blew My Mind'

An investor has pointed out a key statistic that could signal a bright future for NVIDIA Corp NVDA.

What Happened: Yuri Khodjamirian, the Chief Investment Officer at Tema ETFs, highlighted Nvidia’s potential for long-term success, according to CNBC. He pointed to the company’s projected free cash flow over the next two years, which is expected to exceed that of Microsoft Corp MSFT.

"The stat that really blew my mind is that the forecast cash flow for Nvidia for 2026 is higher than Microsoft," Khodjamirian said.

Wall Street analysts predict Nvidia’s FCF to reach $78.7 billion and $91.1 billion in the 2025 and 2026 financial years, respectively. This would surpass Microsoft’s FCF, making Nvidia the highest in the world.

The surge in demand for Nvidia’s AI chips, driven by major software companies like Microsoft, Amazon.com Inc, and Alphabet Inc, is a significant factor in this projection.

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Despite concerns about the uncertainty of AI software revenue, Khodjamirian believes that Nvidia’s fundamentals are strong, especially with the company’s annual product announcements that outpace its competitors.

Anthony Ginsberg, CEO of Gins Global, stated that AI is accelerating the adoption of cloud services, with a substantial portion of IT spending in America focused on the cloud. “If you’re a CEO and don’t have an AI mission, you’re gonna get clobbered,” Ginsberg remarked.

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. He suggests that Microsoft, led by Satya Nadella, and Google, headed by Sundar Pichai, are well-positioned to gain market share from Amazon in the cloud space.

Why It Matters: Nvidia’s recent success has been attributed to its AI chips, particularly the H100 processor. This product has played a crucial role in driving Nvidia’s value past Apple Inc. AAPL to become the world’s second-most valuable company. The H100’s demand is so high that some customers face a six-month wait to receive it, underscoring the chip’s significant impact on the industry, according to a report.

This success has also been reflected in the company’s stock performance. On Saturday, Nvidia’s CEO Jensen Huang surpassed the CEO of Dell Technologies Inc, Michael Dell on the Bloomberg Billionaires Index, with a net worth of $106.1 billion. This surge in wealth was driven by a relentless demand for Nvidia chips fueling artificial intelligence tasks.

Shares of semiconductor giant Nvidia are set for a 10-for-1 stock split after the market closes on Friday. The split aims to make shares more accessible to employees and investors. Starting Monday, Jun. 10, shares will trade on a split-adjusted basis. For every share owned, investors will receive 10 shares of NVDA when the market opens on Monday. Consequently, the share price will be one-tenth of the closing value on Friday.

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Photo via Wikimedia Commons

This story was generated using Benzinga Neuro and edited by Kaustubh Bagalkote