Nvidia has surpassed Google-parent Alphabet in stock market capitalization, securing the third position among U.S. companies just ahead of its upcoming fourth-quarter results announcement. The surge in demand for the Silicon Valley company’s chips, primarily used in artificial intelligence computing, has propelled its stock by an impressive 231% over the past year, reaching record highs and pushing its market value to $1.812 trillion.
In contrast, Alphabet’s market capitalization currently stands at $1.814 trillion. Nvidia’s remarkable performance has been underscored by a 50% surge in its stock this year, positioning it as the top performer among S&P 500 components. This surge has also led Nvidia to join the elite group of the “Magnificent Seven” stocks, surpassing retail giant Amazon.com earlier in February.
Anticipation is high on Wall Street ahead of Nvidia’s fourth-quarter results, with analysts expecting a substantial increase in profit. Estimates suggest a staggering 400% surge in fourth-quarter profit to $11.38 billion compared to the previous year, while revenue is projected to more than triple to $20.37 billion.
Currently, Nvidia trades at 33.19 times its forward earnings estimates, surpassing the industry median multiple of 27.35, according to data from LSEG. A higher multiple indicates that the stock may have already factored in its earnings potential, potentially limiting further growth opportunities.
