Nvidia surpasses alphabet in market cap, becoming the third most valuable U.S. company

Nvidia's market capitalization exceeded that of Google's parent company, Alphabet, on Wednesday, marking a significant milestone for the chipmaker. The surge in Nvidia's stock is a clear indication of the significant impact the artificial intelligence industry has had on its financial performance.

Market value and stock performance

With a closing stock price of $739.00 per share and a market value of $1.83 trillion, Nvidia outpaced Google's market cap of $1.82 trillion. This achievement came on the heels of Nvidia surpassing Amazon's market value just a day earlier.

Soaring demand for AI server chips

The shift in market cap reflects the soaring demand for Nvidia's AI server chips, which are priced at over $20,000 each. Notably, companies like Google and Amazon require thousands of these chips for their cloud services. Nvidia's shares have seen a remarkable 221% surge in the past 12 months, driven by the robust demand for its AI server chips.

Nvidia's evolution

Previously known for its consumer graphics processors for gaming computers, Nvidia's success in the AI chip market has elevated its stature on Wall Street, surpassing even some of the leading software companies and cloud providers known for integrating AI technology into their products.

Challenges faced by Google

Although Google was anticipated to benefit significantly from AI, the company has faced challenges, including layoffs and culture issues, as it strives to incorporate AI services into its products. Despite this, Google shares have still seen a 55% increase over the past 12 months. The company recently unveiled Gemini Advanced, a $20 per month AI subscription, marking its foray into offering paid generative AI products.

Nvidia's position in the Tech Landscape

Nvidia's recent achievement places it as the third largest U.S. company, following closely behind Apple and Microsoft. This milestone underscores the company's significant role in the ever-evolving tech landscape, further solidifying its position as a dominant force in the industry.

As Nvidia prepares to report its quarterly earnings on Feb. 21, analysts are anticipating a substantial 118% annual growth in sales, totaling $59.04 billion. This milestone underscores the company's significant role in the ever-evolving tech landscape, further solidifying its position as a dominant force in the industry.