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Nvidia: Amazon down, Alphabet next?

On Tuesday, AI darling Nvidia (NVDA:US) came close to surpassing Alphabet (GOOGL:US) as the third most valuable company on Wall Street, marking a significant milestone for the leading AI chipmaker. With Nvidia's market capitalization exceeding Amazon's (AMZN:US) for the first time in twenty years, totaling $1.78 trillion after a slight 0.17% slip in its shares, it emerged as a formidable contender. Amazon's market value stood at $1.75 trillion following a 2.15% decline in its stock.

Meanwhile, Alphabet, the parent company of Google was down 1.62%, leaving its market capitalization at $1.81 trillion. This development underscores the evolving dynamics within the tech industry's landscape.

Nvidia has emerged as a prominent beneficiary of the tech industry's fervent pursuit to integrate AI into their offerings, with its graphics processors facing scarcity due to hefty purchases by Meta Platforms (META:US) and other major tech players, amounting to billions of dollars.

Mizuho revised Nvidia’s target price upwards to $825 from $625 in anticipation of the company's upcoming quarterly results scheduled for Feb. 21. Despite closing Tuesday at $721.28, Mizuho's analyst Vijay Rakesh highlighted a surge in demand for Nvidia's top-tier H100 processor, though supply still falls significantly short.

With Nvidia maintaining a dominant position, controlling approximately 80% of the high-end AI chip market, its stock has surged by 46% this year, following a remarkable triple-digit growth in 2023. This optimistic outlook extends to other tech firms like Microsoft (MSFT:US) and Meta, whose shares have soared to record highs fueled by AI prospects.

Alphabet, on the other hand, integrated chatbot technology into its Google search engine and marketed generative AI tools to cloud customers. Despite hitting an all-time high, Alphabet's stock faced a setback post its Jan. 30 quarterly report, falling short of investors' expectations. Nevertheless, its stock has managed a 4% increase in 2024.

Although Nvidia briefly surpassed Amazon in market capitalization on Monday, Amazon regained its lead by the end of the trading session. The last time Nvidia held a higher valuation than Amazon was in 2002, when both were valued at less than $6 billion. By mid-2004, Nvidia's market value had plummeted to under $2 billion, while Alphabet debuted its shares with a valuation of $23 billion.

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