Nvidia Competes with Amazon to Lead AI Chips Race 

Nvidia is poised to surpass Alphabet to become the third largest public company in market capitalization to lead in AI chip making. 

Nvidia is poised to surpass Alphabet to become the third largest public company in market capitalization to lead in AI chip making. 

On Monday, it was announced that for the first time in two decades Nvidia has also surpassed Amazon.com Inc market capitalization, putting it in the lead as the dominant AI chipmaker. 

Nvidia shares dropped 0.17%, leaving its market capitalization at $1.78 trillion surpassing Amazon’s value of $1.75 trillion, due to the drop in the online shopping and cloud computing heavyweight stock of 2.15%. 

In parallel, Google’s Alphabet shares slipped by 1.62%, dropping its market capitalization to $1.81 trillion dollars. 

The Santa-Clara-based chip giant has significantly benefited from the competitive push among tech companies to integrate AI into their products and services. The surge in demand has led to a lack of Nvidia’s graphics processors, as it buys components from Meta and other major tech companies worth billions of dollars. 

In its client note, the Mizuho Financial Group raised the price target for Nvidia’s shares from $625 to $825, ahead of the company’s quarterly results due on February 21. 

Vijay Rakesh, analyst at Mizuho Financial Group wrote that despite the substantial shortage in supply compared to the demand, Nvidia’s impressive H100 processor’s development has shortened, followed by an expressed optimism about significant growth potential in the AI sector for Nvidia, Broadcom, and  rival AMD. 

At the moment, Nvidia controls 80% of the AI chip market, resulting in a surge of 46% of its stock in 2024 alone, after its share price more than tripled in 2023. 

The shares prices of Big Tech giants, including Microsoft and Meta, have also risen to high levels, driven by AI optimism in the tech sector. 

For its part, Alphabet has also integrated its chatbot into Google search engine to market its generative AI tools to cloud customers. 

Google’s parent company’s shares price reached high levels just one day before its quarterly earnings report failed to meet investors’ high expectations, leading to a decline in its share price. Alphabet’s share price remained up by 4% in 2024. 

When the market capitalization of both Amazon and Nvidia was less than $6 billion, the Santa Clara company surpassed the online shopping one in 2002. 

In contrast, Nvidia’s market capitalization fell to less than $2 billion by mid-2004, while Alphabet’s shares were valued at $23 billion. 

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