Nvidia (NASDAQ:NVDA) has overtaken Google-parent Alphabet to become the third most valuable company in the United States, following its recent surpassing of Amazon. This shift in position comes as investors eagerly anticipate the dominant AI chipmaker’s upcoming quarterly report.
Based in Santa Clara, California, Nvidia saw its stock rise by 2.46%, reaching a value of $1.825 trillion. In comparison, Alphabet’s stock climbed 0.55%, resulting in a value of $1.821 trillion.
Nvidia has greatly benefited from the technology industry’s push to integrate AI into various products and services. The company’s stock saw a significant increase just a day after it surpassed Amazon’s market capitalization for the first time in twenty years. Amazon, with a market capitalization of $1.776 trillion, experienced a 1.39% increase in its stock value on Wednesday.
With approximately 80% market share in the high-end AI chip market, Nvidia’s stock has risen by 47% this year, following a more than threefold increase in 2023. However, customers are currently facing shortages of Nvidia’s top-of-the-line components, and AI developers are encountering months-long waiting lists to access its processors through cloud-computing providers.
The optimistic outlook on AI has also led to record highs for other technology-related companies, including Microsoft and Meta Platforms.
Nvidia’s upcoming quarterly report, scheduled for next Wednesday, is expected to be closely monitored by Wall Street. Analysts anticipate another strong quarter and outlook, warning that anything less could dampen the current AI rally on Wall Street.
Jake Dollarhide, Chief Executive Officer of Longbow Asset Management in Tulsa, commented, “The market recognizes Nvidia as the AI king. But if Nvidia has one bad quarterly report, if they don’t overly-exceed investors’ expectations, this thing could sell off 20 or 30 percent in one after-hours session.”
On Wednesday, Susquehanna analyst Christopher Rolland raised his price target for Nvidia’s stock to $850 from $625, citing expectations of strong quarterly results and guidance. As of now, Nvidia shares are trading at $739.
While Microsoft took the lead in the AI race in January, surpassing Apple to become the world’s most valuable company with a value exceeding $3 trillion, state oil giant Saudi Aramco holds the third position as the world’s most valuable publicly-listed company, according to LSEG.
Analysts predict that Nvidia’s revenue for the January fiscal quarter will more than triple to $20.37 billion, driven by the demand for its top-tier AI chips. Adjusted net profit is expected to surge over 400% to $11.38 billion.
Currently, Nvidia is trading at around 34 times expected earnings, up from about 24 in early January, but down from over 50 a year ago, according to LSEG.
Featured Image: Megapixl
Author Stephanie Bédard-Châteauneuf