It's only a matter of time before the world gets its first $10 trillion company, according to celebrated hedge fund manager and tech investor Philippe Laffont. For the Coatue Management founder, it comes down to simple math. The largest U.S. companies today – Nvidia , Apple and Google – are each between 3% and 4% of total global market capitalization, which is roughly $120 trillion. Assuming the global economy grows to $200 trillion over the next 15 years, and assuming the largest company at that time can increase its share of total market capitalization to 5%, that company would be worth about $10 trillion, the MIT graduate said on CNBC's Squawk Box . The real question for Laffont is whether that company will be an already established company or one of the newcomers to global equity markets that are shaking up major indexes. "Which one could it be?" he asked Tuesday. "What's fun for me and what keeps me going is to imagine this index of the future and who's going to be in that ... If you can do that and stomach the daily volatility like today, then you should be able to do well." Equity markets are currently experiencing a reshuffle in the mega-cap stocks, and that might eventually produce a $10 trillion behemoth. SpaceX debuted on the Nasdaq earlier this month at a valuation of $1.77 trillion. Forthcoming initial public offerings from OpenAI and Anthropic are expected to reach valuations close to $1 trillion each. Beside the newcomers, the artificial intelligence buildout has lifted several legacy chipmakers, such as Micron Technology and Broadcom , into the trillion-dollar valuation club, turning the group of " Magnificent Seven " mega-cap companies, christened in early 2023, into something of an obsolete category. "I think it's more like Mag 11, Mag 12, if you think that the Mag is every company over a trillion," Laffont said. " Berkshire , Eli Lilly , there's a couple non-tech ones. You've got TSM , Broadcom, you've got a few others." Laffont's largest public holdings include energy equipment manufacturers GE Vernova and Eaton Corporation , and semiconductor equipment makers Lam Research and Applied Materials . Laffont, an alumnus of Julian Robertson's legendary Tiger Management, made the argument Tuesday that it may be better to invest upstream in the AI hardware supply chain than in the chipmakers themselves, who are battling it out over market share, especially in graphics processing units (GPU). Other investors have made similar arguments recently about technology supply chains and infrastructure. "I still see another two to three [years] – well into 2028 – for AI infrastructure spend," Paul Meeks, head of technology research at Freedom Capital Markets, told CNBC earlier this month, drawing a distinction between investments in frontier AI algorithm companies such as OpenAI and Anthropic, and the facilities on which they run. Critical constraint JPMorgan sees power systems as "the most critical constraint on potential data center capacity growth," according to a report last week. "Hyperscalers have quickly pivoted to a variety of grid workarounds, including behind-the-meter (BTM) gas, co-located generation, flexible interconnects, as well as bring-your-own generation (BYOG)," JP Morgan's Tarek Hamid wrote. Despite the appeal of upstream equipment manufacturers, and increasing competition in the GPU space, Laffont said Tuesday that GPU leader Nvidia is remarkably cheap for its size. Nvidia has a forward price-to-earnings ratio of 19.66, according to FactSet. "It's already so cheap, and that's why, for me, it's more of a reflection for people who think, 'Are we in a bubble? What's going on?'" he said. "It says 20 times earnings but it's more 13 or 14, let's say, buy-side earnings on 2027. It's a very cheap stock."
<small>Source: CNBC</small>
