In the ever-changing landscape of Wall Street, where companies rise and fall, three seemingly unexciting stocks are predicted to outshine the current market leader, Nvidia, by 2029. While Nvidia has experienced an unprecedented surge in valuation, history suggests that its reign at the top will be short-lived.
Nvidia, known for its graphics processing units (GPUs) that power decision-making in enterprise AI data centers, witnessed its valuation skyrocket from $360 billion to nearly $3.5 trillion in less than 18 months. However, past trends indicate that the AI bubble is likely to burst, dragging Nvidia down with it. Investors have consistently overestimated the speed of technology adoption, and artificial intelligence needs more time to mature before it can sustain its market growth.
Moreover, Nvidia’s valuation has reached precarious levels, with its trailing-12-month price-to-sales ratio surpassing 43. This is reminiscent of the dot-com bubble era when similar ratios led to market crashes. Additionally, Nvidia faces operational challenges as its top customers develop their own AI-GPUs, which may not be superior but will offer cheaper alternatives.
As Nvidia’s star fades, three “boring” yet reliable companies are poised to surpass its market cap. Berkshire Hathaway, led by billionaire CEO Warren Buffett, has consistently delivered nearly 20% annualized returns over six decades. With a current market cap of $947 billion, Berkshire Hathaway’s cyclical investments and focus on dividend stocks position it to exceed Nvidia’s valuation. Buffett’s share repurchase program has also boosted the company’s earnings per share, attracting investors.
Visa and Mastercard, the payment-processing giants, hold market caps of $514 billion and $428 billion, respectively. These companies benefit from economic expansions and avoid direct loan loss liabilities by not participating as lenders. Their ability to generate predictable cash flow from developed markets and expand into underbanked regions presents a significant growth opportunity.