On Monday, billionaire Jensen Huang’s Nvidia reached a significant milestone when its market value overtook that of tech behemoths Jeff Bezos’s Amazon and Larry Page’s Alphabet. Nvidia accomplished this achievement due to investors swarming the firm because of its dominant position in the artificial intelligence market, which has caused its stock to soar and quadruple over the last 15 months.
The price of Nvidia’s shares increased by almost 3% and hit a record high of over $740. Due to this, its market value increased to $1.83 trillion, just over the $1.82 trillion of Alphabet and the $1.8 trillion of Amazon. As recently as October 2022, Nvidia’s market capitalization was less than $300 billion, placing it well behind the likes of Alphabet and Amazon, all of whom had valuations of over $1 trillion.
Now ranked fourth globally among publicly traded companies, it is only behind Saudi Aramco ($2 trillion), Apple ($2.9 trillion), and Microsoft ($3.1 trillion). Nvidia is a top manufacturer of semiconductor chip technology that generative AI is based on. Investors have been enthralled by Nvidia’s exceptional financial success and its ability to profit from the growing interest and corporate spending in artificial intelligence.
Nvidia’s AI unit’s rapid growth was the primary driver of the company’s profits before interest, taxes, depreciation, and amortization (EBITDA), which increased by nearly 500% year over year in the most recent quarter. Amazon and Alphabet, which recorded strong earnings growth of 20% or more during the same period, were surpassed by this.
Although Nvidia’s profits and gross revenue are not as large as its trillion-dollar competitors, such as Apple and Microsoft, analysts predict this gap will close soon. Nvidia is still a top choice on Wall Street and a favorite among analysts at Goldman Sachs and Bank of America despite its stock rising more than 50% this year.
Both companies keep their $800 price objective for Nvidia, indicating a further 8% increase in the stock’s value. Notably, Nvidia is now the best-performing company on the S&P 500, having gained 17,000% in the last ten years. Ten years ago, a $1,000 investment in Nvidia would be worth almost $175,000 today.
