In a significant milestone for the tech industry, Nvidia has emerged as the third most valuable company in the United States, surpassing Google-parent Alphabet and overtaking e-commerce giant Amazon. It now sits behind Apple and Microsoft.
On Wednesday, Nvidia’s stock rose by 2.46 percent, propelling its market capitalization to a staggering $1.825 trillion. This surge in value positioned Nvidia ahead of Alphabet, whose market cap stood at $1.821 trillion. The company’s recent gains also follow its achievement of surpassing Amazon in market capitalization for the first time in two decades.
The surge in Nvidia’s stock value comes amidst heightened investor anticipation for the company’s upcoming quarterly report, underscoring its dominant position in the AI chip market.
AI chip market
Nvidia’s ascent to the top three list of U.S. companies reflects its unparalleled dominance in the high-end AI chip market. It controls approximately 80 percent of the market share. The company’s stock price has soared by 47 percent this year, building upon a remarkable performance in 2023, where it more than tripled in value.
Nvidia’s top-of-the-line components are in high demand. This led to shortages and lengthy waiting lists for AI developers seeking to utilize its processors through cloud-computing providers.
Anticipation for quarterly report
Investor anticipation is increasing ahead of Nvidia’s forthcoming quarterly report, scheduled for the following Wednesday. Analysts are expecting another robust quarter and optimistic guidance. Thus, any potential for deviation from expectations could impact Wall Street’s AI rally significantly.
Experts cautioned that a subpar quarterly report could lead to a sharp decline in Nvidia’s stock value, underscoring the company’s critical position in the market.
Read: The AI imperative: Redefining the future of technology
Projections and market valuation
Analysts foresee Nvidia’s January fiscal quarter revenue more than tripling to $20.37 billion due to robust demand for its high-performance AI chips. Moreover, adjusted net profit is expected to surge by over 400 percent to $11.38 billion.
This reflects the company’s stellar performance and market dominance. Despite trading at around 34 times expected earnings, up from 24 in early January, Nvidia’s valuation remains strong. Investors are confident in its future prospects and continued innovation in the AI space.
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