Nvidia's Market Value Nears Amazon's Amid AI Enthusiasm
Nvidia's market value is on the verge of surpassing Amazon and closing in on Alphabet. The surge in Nvidia's stock price is driven by the increasing demand for AI. Nvidia is a top beneficiary of Big Tech companies' investments in AI.
In a remarkable turn of events, Nvidia, the AI chipmaker, is on the brink of surpassing Amazon in market value for the first time in two decades. Wall Street's growing excitement about artificial intelligence has propelled Nvidia's stock to new heights, placing it just 3% below Amazon's market capitalisation of US$1.767 trillion. Furthermore, Nvidia is also closing in on Google-owner Alphabet, with a market value of less than 6% below Alphabet's US$1.812 trillion value, according to LSEG data.
The surge in Nvidia's stock price, which has already seen a 40% increase in 2024, has caught the attention of investors. As of mid-day trading on Wednesday, Nvidia's market capitalisation stood at an impressive US$1.715 trillion. This surge was further fueled by an optimistic report from Morgan Stanley, causing Nvidia's shares to rise by 1.8% to US$694.48. Analyst Joseph Moore from Morgan Stanley raised the price target for Nvidia to US$750 from US$603, citing the continued surge in demand for AI.
Nvidia's success can be attributed to its position as a key player in the race to integrate AI into various products and services. Big Tech companies like Meta Platforms have invested billions of dollars in Nvidia's graphics processors, solidifying its position as a top beneficiary of the AI revolution. However, the high demand for Nvidia's processors has led to months-long waiting lists for AI developers looking to utilise them through cloud-computing providers. Fortunately, these wait times are gradually decreasing, according to Morgan Stanley's Moore.
This impending milestone for Nvidia marks a significant moment in its history. The last time Nvidia's market value surpassed Amazon's was back in 2002 when both companies were valued at under US$6 billion. Since then, Nvidia has experienced exponential growth, becoming the fifth most valuable company in the U.S. stock market after its stock price more than tripled in 2023.
In the broader context of the global market, Microsoft recently overtook Apple to become the world's most valuable company in January. Behind these two tech giants, the world's most valuable publicly-listed companies include state oil giant Saudi Aramco, Alphabet, and Amazon. Saudi Aramco, with a market capitalisation of US$2 trillion, holds the third spot on this prestigious list. However, it is worth noting that the majority of Saudi Aramco's shares are closely held by the Saudi Arabian government, with less than 2% available for trading by investors.
Nvidia's market value is on the verge of surpassing Amazon and closing in on Alphabet.
The surge in Nvidia's stock price is driven by the increasing demand for AI.
Nvidia is a top beneficiary of Big Tech companies' investments in AI.