Nvidia market cap threatens Alphabet after overtaking Amazon

A view of a Nvidia logo at their headquarters in Taipei, Taiwan May 31, 2023. REUTERS/Ann Wang/File Photo

Nvidia was on the verge of overtaking Alphabet as Wall Street’s third most valuable company on Tuesday as the dominant AI chipmaker ended the day with a market capitalization above Amazon’s for the first time in two decades.

Nvidia’s shares slipped 0.17 percent, leaving its stock market value at $1.78 trillion, eclipsing Amazon’s $1.75 trillion value after the online shopping and cloud-computing heavyweight’s stock declined 2.15 percent.

Google-owner Alphabet’s stock dipped 1.62 percent, leaving its market capitalization at $1.81 trillion.

Nvidia has been a top beneficiary of technology companies’ race to build AI into their products and services, with its graphics processors in short supply as Meta Platforms and other Big Tech companies buy billions of dollars worth of its components.

READ: Nvidia sets monthly record with unprecedented market value surge

Mizuho in a client note raised its price target for Nvidia’s stock to $825 from $625 ahead of the Santa Clara, California, company’s quarterly results due on Feb. 21. The stock ended Tuesday at $721.28.

Lead times for Nvidia’s top-shelf H100 processor have declined, “but overall demand far outstrips supply,” Mizuho analyst Vijay Rakesh wrote, adding he sees “substantial AI upside” for Nvidia, Broadcom and Advanced Micro Devices.

AI chip market leader

Nvidia controls about 80 percent of the high-end AI chip market, a position that has sent its stock up 46 percent this year after more than tripling in 2023. Technology-related companies, including Microsoft and Meta, have also rallied to record highs on AI optimism.

Alphabet has put chatbot technology into its Google search engine while marketing generative AI tools to cloud customers. Its stock hit an all-time high a day before its quarterly report on Jan. 30 failed to meet investors’ high expectations and sent its shares tumbling. Alphabet’s stock remains up 4 percent in 2024.

Nvidia’s market capitalization briefly overtook Amazon’s on Monday, but Amazon was back on top by the end of that trading session.

READ: Tech giants jockey for position at dawn of AI age

The previous time Nvidia was more valuable than Amazon was in 2002, when they were each worth under $6 billion. By mid-2004, Nvidia’s stock market value had tumbled to under $2 billion as Alphabet listed its shares at a valuation of $23 billion.

An early leader in the AI race, Microsoft in January overtook Apple to become the world’s most valuable company, now valued at over $3 trillion. State oil giant Saudi Aramco is the world’s third most valuable publicly listed company, according to LSEG.

Widely viewed as lagging in the AI race, Apple’s stock has dropped 4 percent in 2024.

Saudi Aramco has a $2 trillion market capitalization, although over 90 percent of it is closely held by the government of Saudi Arabia and less than 2 percent of its shares are available for trading by investors.