Wall Street has signalled its view of the importance of Nvidia, after continuing to drive up its share price, and in turn ramping up its market capitalisation.

Indeed, on Tuesday Nvidia for the first time overtook Amazon in terms of market value, showing the investor appetite for those firms that supply semiconductors that can run cutting-edge AI systems.

Last week it emerged that Nvidia is to build bespoke semiconductors and chips for certain clients, as its customers including OpenAI, Microsoft, Alphabet and Meta Platforms, race to snap up the dwindling supply of Nvidia chips.

Nvidia’s PCIe A100 GPU. Image credit: Nvidia

Nvidia boom

It should be remembered that Nvidia’s H100 and A100 chips serve as a generalised, all-purpose AI processor for many of those major customers.

And these AI chips are not cheap. While Nvidia does not disclose H100 prices, each chip can reportedly sell from $16,000 to $100,000 depending on the volume purchased and other factors.

Meta for example apparently plans to bring its total stock to 350,000 H100s chips in 2024, demonstrating the hefty financial investment required to compete in this sector, and the value of organisation supplying these semiconductors.

On Tuesday Nvidia’s share price closed at $721.28, giving it a market valuation of $1.78 trillion.

This compared to Amazon, whose share price closed on Tuesday at $168, giving it a market value of $1.75 trillion.

This is the apparently first time since 2002 that Nvidia is worth more than Amazon at the close of trading. Back in 2002, Nvidia was only making silicon for PC computer gaming, after being founded back in 1993.

Nvidia’s share price has risen over 246 percent in the last 12 months, thanks to robust demand for its server AI chips.

Amazon rise

And it is not as if Amazon is declining either, after it reported better-than-expected fourth quarter and annual earnings on 1 February.

Indeed, Amazon posted big increases in both profits and revenues, showing it successfully reined in expenses after axing thousands of staff.

And Amazon’s share price has risen approximately 78 percent in the past 12 months.

Last month Microsoft overtook Apple to become the most valuable company in the United States, by market capitalization, largely on the strength of its cloud partnership with OpenAI and new AI features in Windows and Office.

Wall Street will be closely examining Nvidia financial earnings report on 21 February, with investors expecting 118 percent annual growth in sales to $59 billion.

Tom Jowitt

Tom Jowitt is a leading British tech freelancer and long standing contributor to Silicon UK. He is also a bit of a Lord of the Rings nut...

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