Nvidia surpasses Amazon and Alphabet in market cap, joining 2 trillion dollar elite club
Nvidia, renowned for its graphics cards manufacturing and supplying chips for artificial intelligence, has made history by becoming the third American company to achieve a market cap in excess of 2 trillion dollars- reports Bloomberg.
8:24 AM EST, February 24, 2024
The reasons behind such robust growth are evident - impressive data from the last quarter. Following their financial results announcement, the company's market value escalated by roughly 50 billion dollars to 2.01 trillion - just two days ago it was valued at 1.67 billion. Thus, Nvidia has joined the elite club of corporations whose market value exceeds 2 trillion dollars, alongside Apple and Microsoft.
Nvidia has already significantly surpassed the commerce giant Amazon and Alphabet, Google's parent company, by approximately 190 billion dollars.
Nvidia's recent Quarterly Results
The quarterly results of the tech giant were released Wednesday evening Polish time. They surpassed analysts' expectations in terms of revenue and profits. Nvidia reported $5.15 adjusted earnings per share in the fourth quarter, which was higher than the market expectation of $4.64. Earnings per share a year ago stood at 57 cents.
The company's net profit saw a dramatic increase of 769 percent year on year, rising from 1.41 billion dollars to a staggering 12.29 billion dollars at the end of December 2023.
Mark Haefele, director of investment at UBS Global Wealth Management, outlined the reasons for the tech company's ascension. He suggests that generative artificial intelligence will be the stock market growth theme of the decade, and Nvidia's earnings report is indicative of the robust state of AI infrastructure spending. He further believes that apart from technology, investors should also prepare for a potential continuation of the stock rally, which could be due to a combination of Fed rate cuts, continuing strong GDP growth, and decreasing inflation.
Nvidia has made the most of the industry trend towards large-scale artificial intelligence models, which are developed using this company's high-end graphics processors.
Revenue from Nvidia's Data Center, which now represents the majority of Nvidia's income, increased by 409 percent, reaching 18.4 billion dollars. Concurrently, the company's gaming business, which encompasses graphics cards for laptops and PCs, experienced a growth of 56 percent year on year.
Prior to the surge in its AI chips, graphics cards for gaming were Nvidia's main business, and some Nvidia graphics cards are utilized for artificial intelligence programming.
