Nvidia Leading the AI Boom Finally Surpasses Amazon's Market Cap... 'Big 3' Google Pursuit

The market capitalization of Nvidia, a leading company in artificial intelligence (AI), surpassed Amazon based on the closing price on the 13th (local time). Following Amazon, Google Alphabet, another member of the 'Big 3,' is closely chasing, and Nvidia is aiming to become the first semiconductor company to join the '2 trillion dollar market cap club.'

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On that day in the New York stock market, Nvidia's stock price closed at $721.28 per share, down 0.17% from the previous session. Amid a broad decline in major big tech stocks due to the early rate cut expectations fading after the U.S. January Consumer Price Index (CPI) increase exceeded forecasts, Nvidia's stock price drop was relatively smaller compared to Amazon (-2.15%), Google Alphabet (-1.62%), and Microsoft (MS, -2.15%).

Accordingly, Nvidia's market capitalization recorded $1.78 trillion based on the closing price, surpassing Amazon's $1.75 trillion. Although Nvidia briefly overtook Amazon during trading on the 12th, this is the first time since 2002 that it has surpassed Amazon based on the closing price. At that time, the market caps of both companies were below $6 billion. The economic media CNBC described this as "a signal showing how strong the demand for cutting-edge AI chips is and how strong investors' preference for semiconductor companies is."

In particular, Nvidia is also closely chasing Google Alphabet's market capitalization of $1.805 trillion, aiming to join the Big 3. Given the current trend, there is growing expectation that Nvidia could soon surpass the $2 trillion market cap. If this happens, it would be the fourth company in history after Apple, MS, and Alphabet.

Nvidia, which supplies over 90% of high-value-added semiconductors such as graphics processing units (GPUs) used in AI development to the global market, is considered the biggest beneficiary of the AI boom. Nvidia's stock price has surged 246% over the past year and 45% since the beginning of this year. Amazon has also seen stock price increases of 78% over the past year and 11% this year, supported by various cost-cutting measures, but it has not kept pace with the unstoppable rally of AI leaders like Nvidia. Some in the market even note a 'FOMO' (Fear of Missing Out) sentiment related to Nvidia.

Nvidia is scheduled to release its quarterly earnings on the 21st. Wall Street expects Nvidia's quarterly revenue to reach $59.04 billion, a 118% increase year-over-year. If Nvidia again reports earnings and guidance that exceed expectations, its stock price rally could accelerate further. Ahead of the earnings announcement, leading Wall Street investment banks such as Morgan Stanley and Goldman Sachs raised Nvidia's target price to $750 and $800 respectively earlier this month. UBS also raised Nvidia's target price to $850 on the same day.