Wall Street’s enthusiasm for artificial intelligence has Nvidia on the cusp of becoming more valuable than Amazon.com for the first time in two decades, and the AI chip maker is not far behind Google owner Alphabet.

A 40% surge in Nvidia so far in 2024 has elevated its market capitalisation to US$1.715-trillion as of mid-day trading on Wednesday, only about 3% below Amazon’s $1.767-trillion value, and less than 6% below Alphabet’s $1.812-trillion value, according to LSEG data.

Nvidia’s shares gained 1.8% to $694.48 after an optimistic report from Morgan Stanley. Nvidia reports quarterly results on 21 February.

Morgan Stanley raised its price target to $750 from $603, with analyst Joseph Moore writing in a client note that “AI demand continues to surge”.

After Nvidia’s stock more than tripled in 2023, it has already become the US stock market’s fifth most valuable company.

Nvidia has been a top beneficiary of technology companies’ race to build AI into their products and services, with Meta Platforms and other Big Tech companies buying billions of dollars’ worth of Nvidia’s graphics processors.

AI developers face months-long waiting lists to use Nvidia’s processors through cloud computing providers, although those wait times are coming down, Morgan Stanley’s Moore wrote.

AI race

The last time Nvidia was more valuable than Amazon was in 2002, when they were each worth under $6-billion.

An early leader in the AI race, Microsoft in January overtook Apple to become the world’s most valuable company. Behind that duo, among the world’s most valuable publicly listed companies, are state oil giant Saudi Aramco, Alphabet and Amazon.

Read: Huawei is gearing up to take on Nvidia in AI chips

Saudi Aramco has a $2-trillion market capitalisation, making it the world’s third most valuable publicly listed company, according to LSEG data. However, over 90% of that company is closely held by the government of Saudi Arabia and less than 2% of its shares are available for trading by investors. — Noel Randewich, (c) 2024 Reuters