26, February, 2024
HomeTechnologyNVIDIA's AI Surge Propels Market Cap, Nears Amazon's Valuation

NVIDIA’s AI Surge Propels Market Cap, Nears Amazon’s Valuation

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NVIDIA, the global leader in AI chip manufacturing, is on the brink of surpassing Amazon’s market value, fueled by the increasing interest in artificial intelligence on Wall Street.

In the current year, NVIDIA’s stocks have witnessed a remarkable 40% surge, elevating its market capitalization to $1.715 trillion. This places it within a mere 3% proximity to Amazon’s $1.767 trillion market cap and approximately 6% below Google parent Alphabet’s valuation of $1.812 trillion.

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The recent boost in NVIDIA’s stocks can be attributed to a favorable report from Morgan Stanley, causing a 1.8% rise to $694.48. Analyst Joseph Moore, in the optimistic report, raised the price target from $603 to $750. The report highlights the escalating demand for AI across various sectors, consolidating NVIDIA’s position as a significant player.

Having tripled since 2023, NVIDIA stands as the fifth most valuable company in the US, trailing behind Microsoft, Apple, Google, and Amazon. This marks a significant milestone, as the last time NVIDIA surpassed Amazon in value was nearly 22 years ago when both companies were valued below $6 billion.

The surge in demand for NVIDIA’s AI chips is evident, with major players like Meta and other tech giants investing billions in AI technology. However, the high demand has resulted in extended waiting times for AI developers looking to access NVIDIA’s processors through cloud-computing providers, although efforts are being made to reduce these wait times.

Despite its dominance, NVIDIA faces competition from AMD, which unveiled the MI300 lineup of chips in December 2023, claiming superior AI software performance. Notably, Tesla has also expressed interest in AMD’s AI chips, indicating a dynamic landscape in the AI chip industry.

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As NVIDIA rides the wave of AI advancements and market value ascent, the competition and industry dynamics remain key factors shaping its trajectory in the evolving world of artificial intelligence.

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