Tuesday saw the dominating AI chipmaker Nvidia close in on Alphabet as Wall Street’s third most valuable business, surpassing the latter’s market valuation for the first time in 20 years.

After falling 2.15 percent, Nvidia’s stock value of $1.78 trillion eclipsed that of Amazon, the market leader in cloud computing and online commerce, whose value was $1.75 trillion. Nvidia’s shares fell 0.17%.

With a 1.62% decline in its stock, Alphabet, the company that owns Google, now has a $1.81 trillion market capitalization.

Due to the scarcity of its graphics processors as Meta Platforms and other Big Tech companies purchasing its components at a cost in the billions, Nvidia has benefited greatly from the competition among tech companies to incorporate AI into their goods and services.

Before Nvidia’s quarterly results, which are due on February 21, the Santa Clara, California-based company’s price objective was boosted by Mizuho to $825 from $625 in a client note. On Tuesday, the stock closed at $721.28.

Lead times have shortened for Nvidia’s flagship H100 chip, “but overall demand far outstrips supply,” according to Mizuho analyst Vijay Rakesh, who also expressed optimism about “substantial AI upside” for Advanced Micro Devices, Broadcom, and Nvidia.

With about 80% of the market for high-end AI chips under its hands, Nvidia’s stock has increased 46% this year after more than tripling in 2023. On the back of excitement about AI, technology giants like Microsoft and Meta have also surged to all-time highs.

Alphabet is promoting generative AI tools to cloud clients and integrating chatbot technology into its Google search engine. A day before its quarterly report on January 30 fell short of investors’ lofty expectations and caused its shares to plummet, the company’s stock reached an all-time high. In 2024, Alphabet’s stock gains 4% more.

On Monday, Nvidia momentarily surpassed Amazon in market valuation, but by the end of the trading session, Amazon had regained its lead.

When they were both valued at less than $6 billion in 2002, Nvidia was more valuable than Amazon. As Alphabet listed its shares at a valuation of $23 billion, Nvidia’s stock market value fell to less than $2 billion by the middle of 2004.

Microsoft, a pioneer in the AI race, surpassed Apple in January to take the top spot as the most valuable business in the world, with a valuation of more than $3 trillion. LSEG ranks Saudi Aramco, the state-owned oil giant, as the third most valuable publicly traded corporation globally.

Thought to be trailing behind in the race for artificial intelligence, Apple’s shares fell 4% in 2024.

With a $2 trillion market value, Saudi Aramco is owned by the Saudi Arabian government to a large extent (more than 90%), and fewer than 2% of its shares are traded for profit.

(Adapted from FinancialExpress.com)