Nvidia: Amazon down, Alphabet next?

On Tuesday, AI darling Nvidia (NVDA:US) came close to surpassing Alphabet (GOOGL:US) as the third most valuable company on Wall Street, marking a significant milestone for the leading AI chipmaker.

With Nvidia's market capitalization exceeding Amazon's (AMZN:US) for the first time in twenty years, totalling $1.78 trillion after a slight 0.17% slip in its shares, it emerged as a formidable contender. Amazon's market value stood at $1.75 trillion following a 2.15% decline in its stock.

Meanwhile, Alphabet, the parent company of Google was down 1.62%, leaving its market capitalization at $1.81 trillion. This development underscores the evolving dynamics within the tech industry's landscape.

Nvidia has emerged as a prominent beneficiary of the tech industry's fervent pursuit to integrate AI into their offerings, with its graphics processors facing scarcity due to hefty purchases by Meta Platforms (META:US) and other major tech players, amounting to billions of dollars.

Mizuho revised Nvidia’s target price upwards to $825 from $625 in anticipation of the company's upcoming quarterly results scheduled for Feb. 21. Despite closing Tuesday at $721.28, Mizuho's analyst Vijay Rakesh highlighted a surge in demand for Nvidia's top-tier H100 processor, though supply still falls significantly short.

With Nvidia maintaining a dominant position, controlling approximately 80% of the high-end AI chip market, its stock has surged by 46% this year, following a remarkable triple-digit growth in 2023. This optimistic outlook extends to other tech firms like Microsoft (MSFT:US) and Meta, whose shares have soared to record highs fuelled by AI prospects.

With Nvidia maintaining a dominant position, controlling approximately 80% of the high-end AI chip market, its stock has surged by 46% this year, following a remarkable triple-digit growth in 2023.

Alphabet, on the other hand, integrated chatbot technology into its Google search engine and marketed generative AI tools to cloud customers. Despite hitting an all-time high, Alphabet's stock faced a setback post its Jan. 30 quarterly report, falling short of investors' expectations. Nevertheless, its stock has managed a 4% increase in 2024.

Although Nvidia briefly surpassed Amazon in market capitalization on Monday, Amazon regained its lead by the end of the trading session. The last time Nvidia held a higher valuation than Amazon was in 2002, when both were valued at less than $6 billion. By mid-2004, Nvidia's market value had plummeted to under $2 billion, while Alphabet debuted its shares with a valuation of $23 billion.

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