Nvidia Now Larger Than Amazon

Nvidia has outpaced Amazon in terms of market capitalization, underscoring the robust demand for cutting-edge artificial intelligence (AI) semiconductors.

Closing at $721.28 per share, Nvidia's market value reached $1.78 trillion, surpassing Amazon's $1.75 trillion on Tuesday.

This shift reflects the increasing investor interest in companies involved in AI chip manufacturing.

This marks the first time since 2002 that Nvidia has surpassed Amazon in value after the market closed. In 2002, Nvidia primarily focused on graphics cards for gaming PCs.

However, its recent success is attributed to a substantial 246% surge in its shares over the past 12 months, primarily driven by the strong demand for its server AI chips, each priced at over $20,000.

Major entities like Microsoft, OpenAI, and Meta rely on tens of thousands of these chips to power products such as ChatGPT and Copilot.

While Amazon reported better-than-expected quarterly earnings on February 1, showcasing successful expense management after laying off 27,000 employees, its market value has not matched the meteoric rise of Nvidia.

Amazon's shares have seen a commendable 78% increase in the last 12 months, but the market dynamics reveal an ongoing reshuffling among the world's most valuable companies.

A notable example is Microsoft's January achievement, surpassing Apple to become the most valuable U.S. company by market capitalization.

This shift was largely attributed to Microsoft's strong position in the cloud sector, particularly its partnership with OpenAI and the introduction of new AI features in Windows and Office.

Looking ahead, Nvidia is set to report its quarterly earnings on February 21, with analysts anticipating an impressive 118% annual growth in sales, reaching $59.04 billion.

This further solidifies Nvidia's standing in the competitive landscape, driven by the escalating demand for advanced AI chips.