Nvidia overtakes Alphabet as Wall Street's third most valuable company

Hike in Nvidia stock that made it cross Amazon was noted 2.46%, making its value $1.825 trillion
An undated image displaying Nividia logo. — Pixabay
An undated image displaying Nividia logo. — Pixabay

Nvidia surpassed Alphabet, Google's parent company, as the third most valuable company in the US.

The development comes two days after the AI chipmaker giant left behind Amazon once again after two decades, the e-commerce giant, after its optimistic quarterly report boosted investors's interests.

The hike in Nvidia stock that made it cross Amazon was noted 2.46%, making its value $1.825 trillion. On the other hand, Alphabet's stock rose 0.55% to put its total market value at $1.821 trillion.

Read more: Nvidia's market value surpasses Amazon after two decades

The leading AI chipmaker stands as the top beneficiary among the top contenders in the realm of AI, battling to incorporate the technology in their products and services, Reuters reported.

After a 1.39% increase in its stock price on Wednesday, Amazon's market capitalisation reached $1.776 trillion. The company holds a dominant 80% share of the high-end AI chip market, contributing to a 47% increase in its stock price this year, following a more than tripled growth in 2023. 

Nvidia's top-of-the-line components are facing shortages, leading to long waiting lists for AI developers to access its processors through cloud-computing providers. 

Additionally, technology-related companies like Microsoft and Meta Platforms have also seen surges in their stock prices due to optimism surrounding AI.

"The market recognises 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% in one after-hours session," said Jake Dollarhide, Chief Executive Officer of Longbow Asset Management in Tulsa.

Analysts anticipate Nvidia's fiscal quarter revenue for January to skyrocket, more than tripling to $20.37 billion, driven by the high demand for its premium AI chips, according to data from LSEG. They also predicted a considerable surge of over 400% in its adjusted net profit to $11.38 billion.

Nvidia's stock is currently trading at approximately 34 times the expected earnings, a notable increase from about 24 in early January, but a decrease from over 50 a year ago, as per LSEG data.