Nvidia proves to be riding the AI boom to its advantage after reports indicate that the AI chipmaker has briefly passed Amazon in market value, thus becoming the 4th most valuable company in the US.
Nvidia's stunning feat reportedly comes after its price peaked at $734.96, making Nvidia's market value $1.82 trillion. The retail behemoth Amazon.com ended with $1.81 trillion, only a few billion short of Alphabet, the company that owns Google with a $1.87 trillion market value.
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A sign is posted at the Nvidia headquarters on May 25, 2022 in Santa Clara, California.
Nvidia's passing of Amazon briefly moved the company up to the 4th rank among US-listed companies in terms of value. Two of the most valued US companies, Apple and Microsft, are reportedly valued at $2.89 trillion and $3.09 trillion, respectively.
According to Forbes, Nvidia's profits before interest, taxes, depreciation, and amortization (EBITDA) climbed by more than 500% in the most recent quarter compared to last year. This indicates that Nvidia's value and profitability keep rising, mainly because of its artificial intelligence division's relentless growth, which exceeded Amazon's and Alphabet's remarkable 20%+ earnings growth.
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Nvidia's Soaring Stocks
Although Nvidia's $9.2 billion profit last quarter was far less than Apple's and Microsoft's over $22 billion earnings during the comparable stretch, analysts still predict that Nvidia's financials will soon narrow the gap. Nvidia's gross revenue and profits are not as stunning as its trillion-dollar firm contemporaries.
Even after a more than 50% surge this year, Nvidia is still one of the most well-liked companies on Wall Street and is a top choice for analysts at Bank of America and Goldman Sachs.
Nvidia's stock has soared 223% over the last 12 months, making it the highest performing stock among the so-called "Magnificent Seven" on to the company's strong AI demand forecast. Meta Platforms has increased by 163% to rank 2nd.
In layman's terms, Forbes estimates that with a gain of 17,000% over the past ten years, a 10-year-old $1,000 investment in Nvidia would be worth approximately $175,000 today. Nvidia stock has produced the most significant return of any S&P 500 stock, almost double that of Advanced Micro Devices (AMD), a rival chipmaker and the silver medalist in the AI chipmaking industry.
Arm AI Chipmakers' Rise
Another AI chipmaker riding the highs of the AI wave is Arm Holdings, a British tech semiconductor firm that saw its stocks increase by more than 40% on Monday, as reported by Reuters. This increase comes after another increase last Friday after closing 42% higher at $164; the stock was up 21% at $139.65 as of the previous trading day.
Following a quarterly outlook that exceeded Wall Street's expectations last Wednesday, the British tech company Arm's shares have risen more than 80%, with Monday's increase becoming Wall Street's newest AI favorite.
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