- Judith Akatugba
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Just hours after surpassing Amazon, Nvidia surpassed Google-parent Alphabet to take the third spot as the most valuable American corporation on Wednesday, with investors awaiting the leading AI chipmaker’s next quarterly report.
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The stock of the Santa Clara, California-based corporation increased by 2.46%, making it worth $1.825 trillion, while Alphabet’s stock increased by 0.55%, making it worth $1.821 trillion.
The rush by digital businesses to incorporate artificial intelligence (AI) into their goods and services has benefited Nvidia greatly, and the company’s stock recently saw a boost the day after it concluded a trading session with a market valuation that exceeded Amazon’s for the first time in twenty years.
Amazon’s stock increased 1.39% on Wednesday, bringing its market capitalization to $1.776 trillion.
Almost 80% of the market for high-end AI chips is controlled by Nvidia, a position that has increased the company’s stock price 47% this year after it more than tripled in 2023. Top-tier Nvidia components are in short supply, and AI developers must wait months on large waiting lists to use the company’s processors through cloud computing providers.
Companies in the technology sector, such as Microsoft and Meta Platforms, have also risen to all-time highs due to excitement about AI.
Next Wednesday’s Nvidia quarterly report is expected to be one of Wall Street’s most anticipated releases of the week. Investors cautioned that anything less than the expected blowout quarter and outlook from analysts might deflate Wall Street’s AI boom.
“Nvidia is acknowledged by the market as the AI king. However, this might sell off 20 or 30 percent in a single after-hours session if Nvidia releases one poor quarterly report or fails to significantly surpass investors’ expectations, according to Jake Dollarhide, CEO of Tulsa’s Longbow Asset Management.
Christopher Rolland, an analyst with Susquehanna, raised his price objective for Nvidia’s stock on Wednesday from $625 to $850, citing his expectation of excellent quarterly results and guidance. At closing, Nvidia’s stock price was $739.
Microsoft, a pioneer in the AI race, surpassed Apple in January to take the top spot as the most valuable business in the world, with a valuation of more than $3 trillion. LSEG ranks Saudi Aramco, the state-owned oil giant, as the third most valuable publicly-traded corporation globally.
Based on LSEG data, analysts predict that Nvidia’s sales for the January fiscal quarter will more than triple to $20.37 billion, driven by demand for its premium AI chips. Analysts predict that its adjusted net profit will reach $11.38 billion, a 400% increase.
According to LSEG, Nvidia is currently trading at about 34 times projected earnings, up from roughly 24 in early January and down from over 50 a year ago.
