Last Tuesday, California-based chipmaker Nvidia’s market capitalization surpassed that of US retail giant Amazon. It was the first time since 2002 that the company was more valuable than Amazon at the end of the day.
It’s a sign of strong demand for semiconductors that power artificial intelligence and investor appetite for the companies that make the chips. Nvidia closed at $721.28 per share, giving it a market capitalization of $1.78 trillion versus Amazon’s $1.75 trillion.
Nvidia’s main products in 2002 were graphics cards for gaming computers. But the company’s shares have surged more than 246 percent in the past 12 months due to strong demand for its artificial intelligence chips, which can cost more than $20,000 each.
Companies like Microsoft, OpenAI and Meta need tens of thousands of these chips to run products like ChatGPT and Copilot.
Amazon reported better-than-expected quarterly earnings, showing that it successfully reduced its spending. Company shares have increased by about 78 percent in the last 12 months.
There seems to be an ongoing tug-of-war between the world’s most valuable companies. In January, for example, Microsoft overtook Apple to become the most valuable US company by market capitalization, thanks (for a while) to its cloud partnership with OpenAI and new artificial intelligence features in Windows and Office.
Nvidia will release its quarterly revenue report on February 21. Analysts expect sales to increase 118 percent year-on-year to reach 59.04 billion dollars.
