Nvidia brushes shoulders with Amazon and Google in market value

13 Feb 2024

Image: © BINGJHEN/Stock.adobe.com

A clear leader in the AI chips market, Nvidia’s stock has more than quadrupled in the last 15 months.

Nvidia briefly overtook Amazon in market value yesterday (12 February) as the demand for AI chips continues to soar.

At a record high of nearly $735, reports suggest Nvidia’s share price brought its market value to $1.82trn – ahead of the $1.81trn that Amazon is worth. This also brought the chipmaker close to the $1.87trn market value of Google parent, Alphabet.

Nvidia’s stellar rise in value is a result of a growth in the popularity of generative AI, the models that power which need advanced chips to train – a market it dominates.

This led to Nvidia becoming the first chipmaker to be valued at $1trn in May last year. According to Forbes, Nvidia’s stock has more than quadrupled over the last 15 months.

In August last year, Nvidia reported record sales of $13.51bn in its second fiscal quarter of 2023. This was driven largely by its data centre business, which is responsible for the Nvidia A100 and H100 chips that are crucial for generative AI.

In its most recent earnings report in November, Nvidia saw revenue rise to $18.12bn, a 34pc increase from the previous quarter and more than 200pc higher than what it made in the same period in 2022.

Nvidia’s data centre sector was the biggest contributor to this increase, reaching revenues of $14.51bn, a 279pc increase compared to the same quarter last year.

The company’s record revenue also led to a staggering increase in its net income for the quarter. Nvidia made more than $9.2bn in net income for its latest quarter, a year-on-year increase of 1,259pc.

Founder and CEO Jensen Huang attributed this strong growth to a broader transition companies are making from “general-purpose to accelerated computing and generative AI”.

“Large language model start-ups, consumer internet companies and global cloud service providers were the first movers, and the next waves are starting to build,” Huang said at the time.

But it wasn’t all smooth sailing for the company last year. One of its offices was reportedly raided in October by French authorities due to suspected “anticompetitive practices”. In November, it was sued by automotive supplier Valeo for allegedly stealing its trade secrets.

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Vish Gain is a journalist with Silicon Republic