Nvidia has outpaced the e-commerce and cloud giant Amazon in market value, reflecting Wall Street's recognition of the increasing significance of the semiconductor industry, particularly in AI.
The boost comes as Nvidia experiences a surge in its share price, underlining the investor enthusiasm for companies supplying cutting-edge AI systems.
Nvidia's strategic move to develop customized semiconductors for clients, including major players like OpenAI, Microsoft, Alphabet, and Meta Platforms, has intensified as these entities race to secure Nvidia chips in a market with diminishing supply. The H100 and A100 chips from Nvidia serve as versatile AI processors for these major customers but come at a significant cost, reportedly ranging from $16,000 to $100,000 per chip.
Closing at $721.28 on Tuesday, Nvidia's share price has propelled its market valuation to $1.78 trillion, surpassing Amazon, whose market value stands at $1.75 trillion. This marks the first time since 2002 that Nvidia has exceeded Amazon's market value at the close of trading. Nvidia's remarkable growth, with a share price surge of over 246% in the last 12 months, is attributed to robust demand for its server AI chips.
Despite Amazon's commendable performance, with a 78% rise in share price over the past year and strong fourth-quarter and annual earnings, Nvidia's ascent highlights the current emphasis on semiconductor companies. Microsoft's recent surpassing of Apple as the most valuable company in the United States further underscores the industry's shift towards cloud partnerships and AI integration.
Investors eagerly anticipate Nvidia's financial earnings report on February 21, with expectations of a 118% annual growth in sales, reaching $59 billion. The competition for dominance in the semiconductor and AI sector continues to drive these companies to new heights.