- Nvidia‘s market value surpasses Amazon‘s for the first time since 2002, reaching $1.78 trillion.
- Booming demand for Nvidia’s AI chips, essential for advanced products like ChatGPT and Copilot, propels its stock by over 246% in the last year.
- Analysts project Nvidia’s sales to soar by 118% annually, with the company’s AI chip success earning it top picks from Goldman Sachs and Bank of America.
Nvidia has surpassed Amazon in market capitalization, marking a significant milestone for the semiconductor and AI technology company. On Tuesday, Nvidia’s shares closed at $721.28, giving it a market value of $1.78 trillion, which exceeded Amazon’s market cap of $1.75 trillion. This marks the first time since 2002 that Nvidia has been more valuable than Amazon after the market close.
The surge in Nvidia’s market value is attributed to the booming demand for its AI chips, which are essential for running advanced AI-driven products like ChatGPT and Copilot. These server AI chips can cost more than $20,000 each, and companies such as Microsoft, OpenAI, and Meta require tens of thousands of them for their operations. Nvidia’s stock has seen a dramatic increase of over 246% in the last 12 months due to this robust demand.
Analysts are optimistic about Nvidia’s future, with expectations of continued strong demand for AI compute capacity. Nvidia is set to report its quarterly earnings on February 21, with analysts projecting significant growth in sales to $59.04 billion, which would represent 118% annual growth. The company’s success in the AI chip market has also led to its stock being a top pick for analysts at Goldman Sachs and Bank of America, each of which has an $800 price target for Nvidia.
Amazon, while also performing well with shares up about 78% in the past 12 months, reported better-than-expected quarterly earnings on February 1, showing successful expense management after laying off 27,000 employees. Despite this, the investor appetite for AI technology and the companies that enable it, like Nvidia, has led to a reshuffling among the world’s most valuable companies.
Conclusion
Nvidia’s market capitalization has surpassed that of Amazon, driven by the strong demand for its AI chips and the broader market enthusiasm for AI technology. This shift reflects Nvidia’s rapid ascent in the technology sector and the growing investor interest in companies at the forefront of the AI boom.
