On February 14, 2024, Nvidia, a leading semiconductor company, outstripped Alphabet, the parent company of Google, to become the third-largest U.S. company by market value.
This milestone was achieved due to strong demand for Nvidia’s chips, particularly those used in artificial intelligence computing, which drove the company’s stock price up by 231% in the past 12 months.
Nvidia’s market capitalization reached $1.812 trillion, surpassing Alphabet’s $1.814 trillion.
This achievement marked Nvidia’s entry into the league of the Magnificent Seven stocks, a group of top-performing companies in the S&P 500.
Nvidia’s stock performance has been particularly impressive, with a 50% surge in the year leading up to this event, outpacing even Amazon.com.
Wall Street analysts expect Nvidia to report fourth-quarter profits of $11.38 billion, a staggering 400% increase from the previous year, and revenue of $20.37 billion, a more than three-fold increase.
Despite this impressive growth, Nvidia’s stock trades at 33.19 times its forward earnings estimates, which is above the industry median multiple of 27.35.
This higher multiple indicates that the stock may have already priced in its earnings potential, leaving little room for further growth.
Nvidia’s rise to the third-largest U.S. company by market value is a testament to the company’s success in the AI sector, which has been a major driver of growth in the technology industry. This achievement also highlights the importance of AI in shaping the future of technology and the economy.
