Nvidia briefly surpasses Amazon in market value as AI boom rages on

Nvidia reached a significant milestone on Monday, briefly surpassing Amazon.com in market value and becoming the fourth most valuable company in the United States. The latest surge in value, driven by excitement surrounding artificial intelligence, propelled Nvidia to a market capitalization of $1.82 trillion, just ahead of Amazon’s $1.81 trillion.

Reaching a record high of $734.96, Nvidia boasted a market value of $1.82 trillion, edging out Amazon.com at $1.81 trillion. The company was just a few billion dollars shy of Google-owner Alphabet’s $1.87 trillion, CNBC reported, citing data from LSEG.

This milestone occurred less than a year after Nvidia first reached a $1 trillion market cap, placing it in an elite group alongside Alphabet, Amazon, Apple, and Microsoft. The last time Nvidia held a higher value than Amazon was back in 2002 when both were valued at under $6 billion.

Investor attention now turns to Nvidia’s upcoming quarterly results on Feb. 21, especially after Amazon reported higher-than-expected sales during the holiday quarter. Nvidia’s stock has been on a tear, gaining 47% year-to-date and emerging as the top performer among S&P 500 components.

Nvidia’s success can be attributed to the surge in demand for AI, particularly in the realm of generative AI like chatbots and image creation. This focus on AI has significantly boosted Nvidia’s stock, outperforming even the most lucrative stocks like those of Meta Platforms (formerly Facebook). A year ago, Nvidia’s exceptional quarterly results and robust forecasts established it as the primary supplier to tech companies in this sector.

The anticipation of strong AI demand has propelled Nvidia’s shares to a 223% surge over the past 12 months, making it the best-performing stock among the “Magnificent Seven,” with Meta Platforms following closely with a 163% rise.

The landscape of the world’s most valuable companies has seen Microsoft surpassing Apple in January, claiming the top spot, with Alphabet securing the third position. In addition, Nvidia also positioned itself as a leader in chip technology, playing a pivotal role in shaping the future of artificial intelligence.

Nvidia’s graphics processing units (GPUs) are instrumental in powering generative AI platforms like OpenAI’s ChatGPT and Google’s Bard. While traditionally known for dominating the discrete GPU market in high-performance gaming, Nvidia’s GPUs have recently gained recognition for their broader applications in artificial intelligence and machine learning.

The success of OpenAI’s ChatGPT has not gone unnoticed by tech giants like Alphabet and Microsoft, who are now leveraging the potential of generative AI for human-like conversations and diverse content creation, including jokes and poetry.

Founded in 1993 by CEO Jensen Huang, along with Chris Malachowsky and Curtis Priem, Nvidia specializes in designing and manufacturing GPUs for gaming, artificial intelligence, and various applications. The company has earned widespread acclaim for its contributions to AI and advancements in the gaming industry.