Keithen Drury, The Motley Fool
5 min read
Anthropic has filed its S-1 with the Securities and Exchange Commission (SEC), which signals its intent to go public in the future. Some of the information in this document is incredible, ranging from AI risks to the sheer amount of money Anthropic plans to spend over the next few years. However, there’s one overarching theme that prevails in the S-1 document that makes me want to invest in a different stock entirely: Nvidia (NASDAQ: NVDA).
Nvidia has been the undisputed leader among AI investments since this trend started in 2023. However, it hasn’t done as well recently, even though its business is booming. Seeing Anthropic’s S-1 filing gave me confidence that Nvidia’s still a great stock to buy, and that now could be the perfect buying opportunity.
Missed AI’s “Act 1”? Act 2 Could Be 14x Bigger. Most investors think they missed the AI boat because they didn’t buy Nvidia in 2005. But according to our analysts, we’re only at the end of “Act 1″—the R&D phase. “Act 2” is the global rollout. Continue »
The AI build-out is far from over
Anthropic lists several major industry partners, including Nvidia. Anthropic uses multiple chips to train and run its AI models, and can easily select the cheapest option for the given workload. Nvidia’s graphics processing units (GPUs) are also used heavily in cloud computing environments, as companies that are hosting an internal AI model or creating a product that has Anthropic’s Claude as its AI backbone will need to pay for their own cloud computing costs. These workloads also use Nvidia GPUs, so it’s clear that Nvidia’s products are being used all over the place.
Anthropic also has lots of commentary about the length of time its spending will last, often citing timeframes that are five to 10 years out. That pretty clearly shows that, in Anthropic’s view, the AI build-out is a long way from wrapping up. Nvidia supports that thesis, as it believes global AI data center capital expenditures will rise to $3 trillion to $4 trillion annually by 2030. Anthropic will be a major part of that figure, and all that will add up to Nvidia’s business continuing to expand.
However, the market doesn’t believe it, even if it’s looking it directly in the face.
The market isn’t assuming any growth past 2026 for Nvidia
Nvidia has already given strong guidance for 70% revenue growth in 2027. The problem is, the market hasn’t factored a single penny of growth into its stock price beyond 2026.
Nvidia trades for about 23 times this year’s earnings estimates. If you use next year’s, that figure tumbles to a dirt cheap 13.6 times earnings.
