Nvidia outstrips Alphabet as third largest US company by market value

FILE PHOTO: A view of a Nvidia logo at their headquarters in Taipei, Taiwan May 31, 2023. REUTERS/Ann Wang/File Photo

(Reuters) -Nvidia overtook Google-parent Alphabet’s stock market capitalization to become the third biggest U.S. company on Wednesday, days before the poster child of AI boom is due to report fourth-quarter results.

FILE PHOTO: A screen tracks NVIDIA Corp. as a trader works on the floor at the New York Stock Exchange (NYSE) in New York City, U.S., October 23, 2023. REUTERS/Brendan McDermid/File Photo

Strong demand for the Silicon Valley company’s chips used in artificial intelligence computing has powered the stock 231% in the past 12 months to record highs, taking its market value to $1.83 trillion.

FILE PHOTO: Alphabet logo is seen near computer motherboard in this illustration taken January 8, 2024. REUTERS/Dado Ruvic/Illustration/File Photo

In comparison, Alphabet’s market capitalization is $1.82 trillion.

A 50% surge this year has lifted Nvidia to the top spot among the S&P 500 components stock performance, surpassing even the components of Magnificent Seven.

Earlier this week, it exceeded Amazon.com’s market value, leaving the retail giant in the fifth spot. Microsoft overtook Apple last month to become the largest U.S. company.

Wall Street expects Nvidia to post $11.38 billion in fourth-quarter profit, up more than a staggering 400% from a year ago. Its revenue is expected to surge over three-fold to $20.37 billion.

Nvidia now trades 33.19 times its forward earnings estimates, above the industry median multiple of 27.35, per LSEG data.

A higher multiple indicates the stock is more likely to have priced in its earnings potential, leaving little room for further growth.

(Reporting by Medha Singh in Bengaluru; Editing by Arun Koyyur)