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Nvidia is now the third most valuable company in the U.S. — thanks to AI, of course

The biggest company most Americans never heard of!


Nvidia is now the third most valuable company in the U.S. — thanks to AI, of course

The chipmaker is more valuable than the tech giants Alphabet and Amazon

By Michelle Cheng, Quartz Media

Feb 15, 2024


Nvidia’s market capitalization — which stands at $1.88 trillion — has now surpassed the market caps of both Amazon ($1.75 trillion) and Google parent Alphabet ($1.77 trillion) as of Thursday morning. That establishes the chipmaker the third most valuable company in the U.S. Nvidia stock is up 50.41% year to date.


Why is Nvidia so valuable right now? Because generative AI is all the hype right now in the tech industry, and Nvidia makes the top-of-the-line chips needed to power the AI systems behind the world’s biggest generative AI players, ChatGPT and Gemini. Last year, following OpenAI’s launch of AI chatbot ChatGPT, tech companies started announcing their own AI products, which led to a steep demand for Nvidia’s costly H100 chips and caused somewhat of a buying frenzy.


It helps that the Santa Clara, California-based company’s biggest customers are tech giants like Microsoft and Meta, and they need a ton of chips to fuel AI ambitions that go beyond AI chatbots. Microsoft and Meta spent $4.5 billion each on H100 chips last year, according to financial services firm DA Davidson.


Given the cost and scarcity of AI chips, chipmakers like AMD have also released their own rival chips. At the same time, Nvidia’s biggest customers have also announced their own in-house chips tailored for AI. Nvidia currently holds 80% of the AI chips market, analysts estimate.


Nvidia will release its quarterly results next Wednesday after the market closes, and there’s pressure on the company to exceed investors’ expectations.

Wall Street has been enthusiastic about AI. Last month, Microsoft, another AI leader, had overtaken Apple briefly as the world’s most valuable company.

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