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Key Points
- Nvidia poised to surpass Amazon in market capitalization
- Surging demand for artificial intelligence fuels Nvidia's rise
- Morgan Stanley predicts continued growth, raising Nvidia's price target
Wall Street's excitement surrounding artificial intelligence is propelling Nvidia toward a historic milestone: surpassing Amazon in market value for the first time in two decades. Additionally, the AI chipmaker is closing in on the market capitalization of Google-owner Alphabet.
A remarkable 40% surge in Nvidia's stock price since the beginning of 2024 has catapulted its market capitalization to $1.715 trillion as of mid-day trading on Wednesday. This places it a mere 3% shy of Amazon's $1.767 trillion valuation and less than 6% below Alphabet's $1.812 trillion valuation, according to LSEG data.
The bullish sentiment surrounding Nvidia received further validation when its shares climbed 1.8% to $694.48 following an optimistic report from Morgan Stanley. With quarterly results due on Feb. 21, Morgan Stanley raised its price target for Nvidia to $750 from $603. Analyst Joseph Moore cited the ongoing surge in demand for AI as a key driver of growth.
After witnessing its stock price more than triple in 2023, Nvidia has already ascended to become the fifth most valuable company in the U.S. stock market.
Nvidia has emerged as a primary beneficiary of the technology industry's fervent pursuit of integrating AI into various products and services. Major players like Meta Platforms and other tech giants have invested billions in Nvidia's graphics processors to bolster their AI capabilities.
Developers seeking access to Nvidia's processors face considerable wait times through cloud-computing providers, though these wait times are gradually diminishing, according to Morgan Stanley's Moore.
The last time Nvidia surpassed Amazon in market value was back in 2002, when both companies were valued at under $6 billion.
Notably, Microsoft recently claimed the title of the world's most valuable company, surpassing Apple in January. Among the world's most valuable publicly-listed companies, Saudi Aramco, Alphabet, and Amazon trail behind Microsoft and Apple.
Saudi Aramco boasts a market capitalization of $2 trillion, making it the world's third most valuable publicly listed company. However, the vast majority of the company is state-owned, with less than 2% of its shares available for public trading.
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