Chipmaker Nvidia's market capitalization has just surpassed Alphabet to become the third most valuable company in the US, as investors are optimistic about the AI wave.
At the close of trading on February 14, Nvidia shares rose 2.46%, bringing its market capitalization to $1.825 billion. Alphabet shares rose just 0.55%, bringing its market capitalization to $1.821 billion. This helped Nvidia surpass and become the third most valuable company in the US.
A day earlier, Nvidia's market capitalization surpassed Amazon's for the first time in two decades. Amazon's market capitalization is currently $1,776.
Nvidia is the biggest beneficiary of the race among tech companies to integrate AI into their products. It controls about 80% of the market for high-end AI chips, a position that has helped its stock surge 47% this year, after already tripling in 2023.
Other tech companies, from Microsoft to Meta Platforms, have also seen their stocks soar to record highs thanks to the AI wave. Last month, Microsoft surpassed Apple to become the world’s most valuable company, with a market capitalization of more than $3 trillion.
Nvidia will report its fourth-quarter 2023 financial results next week, which are being closely watched by Wall Street. Analysts say the chipmaker will have another strong quarter with bright prospects. But if it misses expectations, the AI bubble could burst.
"The market now sees Nvidia as the king of AI. But that also means that if they have a bad quarterly report that doesn't exceed investor expectations, the stock price can drop by 20-30% in after-hours trading," warned Jake Dollarhide, CEO of Longbow Asset Management.
Analysts forecast Nvidia's revenue last quarter more than tripled to $20.3 billion. Net income could jump 400% to $11.3 billion.
Ha Thu (according to Reuters)
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