Nvidia Surpasses Alphabet After Amazon: A Continuation of Unprecedented Growth

Feb 15, 2024

Nvidia’s market rally shows no signs of slowing down. Just a day after eclipsing Amazon’s market value, the chip giant has now surpassed Alphabet, cementing its position as the world’s fourth-most valuable company. Nvidia’s shares rose by 2.5%, closing with a market capitalization of approximately $1.83 trillion, outpacing Alphabet’s value of around $1.82 trillion.

Nvidia’s 2024 rally has been nothing short of spectacular, with a 49% climb and a staggering addition of $602 billion in value. This surge is largely attributed to the unprecedented demand for its accelerators fueling data centers driving complex computing tasks essential for artificial intelligence applications.

While other major tech stocks have performed well in 2024, Nvidia’s rally has set it apart. The company is slated to report earnings on Feb. 21, and analysts are optimistic about another strong report, although acknowledging the elevated expectations.

Susquehanna Investment Group analyst Christopher Rolland notes, “Expecting another strong report, but the bar has been raised.” Wall Street analysts point to continued robust demand for Nvidia’s AI H100 accelerators, driven by substantial AI spending from major customers like Microsoft and Meta.

Several brokers have raised price targets for Nvidia in February, reflecting the positive sentiment. Analysts, on average, have increased 2024 revenue estimates by over 100% in the last 12 months, highlighting the company’s significant revenue growth from AI amid the broader AI frenzy influencing tech stocks.

Performance Overview:

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Stock Analysis:

FAQ:

1. What is driving Nvidia’s market rally? Nvidia’s unprecedented growth is fueled by the soaring demand for its accelerators used in data centers for complex computing tasks essential for artificial intelligence applications.

2. How does Nvidia’s 2024 performance compare to other major tech stocks? Nvidia’s rally has outpaced other major tech stocks, making it the top performer among S&P 500 components and surpassing even the components of the Magnificent Seven.

3. What are analysts expecting from Nvidia’s upcoming earnings report? Wall Street expects Nvidia to post a fourth-quarter profit of $11.38 billion, reflecting a remarkable 400% increase from a year ago. Revenue is projected to surge over three-fold to $20.37 billion.

4. How does Nvidia’s forward P/E ratio compare to the industry median? Nvidia’s forward P/E ratio is 33.19, surpassing the industry median of 27.35, indicating that the stock may have priced in its earnings potential, leaving limited room for further growth.

Conclusion:

Nvidia’s remarkable ascent positions it as a key player in the tech industry’s evolution, particularly in the realm of artificial intelligence. As the company continues to demonstrate impressive financials, it remains a focal point in the dynamic landscape of tech investments. Investors and analysts are keenly observing Nvidia’s trajectory, with high expectations for its upcoming earnings report and future performance.