In a remarkable milestone that underscores the booming demand for artificial intelligence (AI) technology, Nvidia, a dominant supplier of AI hardware and software headquartered in California, has outpaced Amazon in market capitalization, a feat not seen since 2002. This shift highlights the burgeoning investor interest in semiconductor companies, especially those at the forefront of AI chip production.
Closing at $721.28 per share, Nvidia achieved a market valuation of $1.78 trillion, surpassing Amazon‘s market cap of $1.75 trillion. Although Nvidia briefly edged out Amazon in market value on Monday, this marks the first occasion since 2002 that Nvidia has maintained its lead post-market close.
Historically known for its graphics cards for gaming PCs, Nvidia has seen its shares skyrocket by over 246% in the past 12 months, driven by strong demand for its server AI chips. These high-end chips, some costing upwards of $20,000 each, are crucial for tech giants like Microsoft, OpenAI, and Meta, which require thousands of them to power AI-driven products such as ChatGPT and Copilot.
Amazon, on the other hand, is not trailing far behind. The e-commerce giant reported better-than-expected quarterly earnings on February 1, demonstrating its ability to curtail expenses following the layoff of 27,000 employees. Amazon‘s growth narrative continues, with its shares up approximately 78% over the past year, albeit at a different pace compared to Nvidia.
This reshuffling among the world’s most valuable companies is part of a broader trend. In January, Microsoft eclipsed Apple to become the most valuable U.S. company by market capitalization, propelled by its cloud partnership with OpenAI and the introduction of new AI features in its Windows and Office suites.
As Nvidia prepares to announce its quarterly earnings on February 21, analysts are projecting a staggering 118% annual growth in sales, reaching $59.04 billion. This forecast further cements Nvidia‘s position as a leader in the AI chip market and underscores the critical role of advanced semiconductors in powering the next generation of technological innovation.
