Nvidia has displaced Alphabet as Wall Street’s third most valuable business

Nvidia introduces cloud-based infrastructure for 6G research and testing
Nvidia introduces cloud-based infrastructure for 6G research and testing

Nvidia has surpassed Google-parent Alphabet as the third most valuable U.S. corporation after surpassing Amazon.

Nvidia (NVDA.O) eclipsed Google-parent Alphabet (GOOGL.O) and surpassed Amazon (AMZN.O) to become the third most valuable U.S. corporation on Wednesday, as investors awaited the dominating AI chipmaker’s impending quarterly report.

The Santa Clara, California-based company’s shares increased by 2.46%, valued at $1.825 trillion, while Alphabet’s stock rose by 0.55%, valued at $1.821 trillion.

Nvidia has been a major benefactor of technology companies’ drive to incorporate AI into their products and services, and the most recent increase in its stock came a day after it completed a session with a market valuation greater than Amazon’s for the first time in two decades.

Amazon’s market value was $1.776 trillion after its stock jumped by 1.39% on Wednesday.

Nvidia owns over 80% of the high-end AI chip market, which has lifted its stock price by 47% this year after more than tripling in 2023. Customers experience shortages of Nvidia’s top-tier components, while AI developers face months-long wait times to use its processors via cloud-computing providers.

Technology companies, like Microsoft (MSFT.O) and Meta Platforms (META.O), have risen to record highs on AI confidence.

Nvidia’s quarterly report next Wednesday will be one of Wall Street’s most anticipated of the week. Analysts anticipate another record-breaking quarter and outlook, and anything less might deflate Wall Street’s AI surge, some investors warn.

“The market sees Nvidia as the AI king. But if Nvidia has one terrible quarterly report and they don’t outperform investors’ expectations, this stock could fall 20 or 30 percent in one after-hours session,” said Jake Dollarhide, CEO of Longbow Asset Management in Tulsa.

On Wednesday, Susquehanna analyst Christopher Rolland raised his price objective for Nvidia’s stock to $850 from $625, citing solid quarterly results and forecasts. Nvidia shares recently traded at $739.

Microsoft, an early leader in the AI race, surpassed Apple in January to become the world’s most valuable business, with a market value of more than $3 trillion. LSEG ranks Saudi Aramco as the world’s third-most valuable publicly traded corporation.

Analysts expect Nvidia’s January fiscal quarter revenue to more than triple to $20.37 billion, driven by demand for its top-tier AI chips, according to LSEG data. Analysts expect its adjusted net profit to increase by more than 400% to $11.38 billion.

Nvidia is priced at over 34 times projected profits, up from about 24 in early January and down from over 50 a year ago, according to LSEG.

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