In a notable milestone, Nvidia has surpassed Alphabet, the parent company of Google, in terms of stock market capitalization, securing the position as the third largest company in the United States. This achievement comes just ahead of the eagerly anticipated fourth-quarter results announcement for Nvidia, a company synonymous with the artificial intelligence (AI) revolution.
The remarkable ascent of Nvidia’s stock, driven by robust demand for its chips essential for AI computing, has propelled its market value to $1.812 trillion, marking a staggering 231 percent surge over the past year. By comparison, Alphabet’s market capitalization stands at $1.814 trillion.
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Nvidia’s impressive performance extends beyond market value alone. With a 50 percent surge in its stock price this year, it has emerged as the top performer among the S&P 500 components, even surpassing industry giant Amazon.com earlier in February.
Wall Street analysts are eagerly anticipating Nvidia’s fourth-quarter results, with expectations of a substantial increase in profit to $11.38 billion, representing a remarkable 400 percent surge from the previous year. Revenue forecasts are equally optimistic, projecting a three-fold increase to $20.37 billion.
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Despite its stellar performance, Nvidia’s current trading multiple of 33.19 times its forward earnings estimates, as per LSEG data, surpasses the industry median of 27.35. This higher multiple suggests that the stock may have already factored in much of its earnings potential, leaving limited room for further growth.
