Technology

Nvidia Stock Tops All Other Megatech Companies

Nvidia
BING-JHEN HONG / iStock Editorial via Getty Images

It is simple math. So far, Nvidia stock is up 46% this year. Meta’s is up 34%, while Amazon’s is up 7%, Alphabet’s is flat, and Apple’s is down 5%. What happened?

Other than Nvidia Corp. (NASDAQ: NVDA), each megacap tech company has a large footprint in what could be called old technology. In the case of Microsoft Corp. (NASDAQ: MSFT), this is operating systems and hardware. For Apple Inc. (NASDAQ: AAPL), most of its business is hardware-based.

As for Alphabet Inc. (NASDAQ: GOOGL), search is over two decades old, although its capacity has been improved. Amazon.com Inc. (NASDAQ: AMZN) is the leader in e-commerce, a three-decade-old business. And it has AWS, the cloud leader, but AI valuations have eclipsed even the investment metrics for the cloud.

Meta Platforms Inc. (NASDAQ: META) is the leader in social media by far. But it is a two-decade-old business, the revenue growth pace of which has slowed.

AI Boosts Nvidia Stock

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Each of these companies has pushed into artificial intelligence, but Nvidia has close to a monopoly on the chips on which AI runs. The stock market has driven Nvidia’s share price higher for a specific reason. The Motley Fool pointed out, “There’s good reason to believe Nvidia is a top AI stock. Management attributes its surging revenue to AI-related products and services. To illustrate how strong demand is, the company expects to report revenue of $20 billion in its fiscal 2024 fourth quarter. That would be a 231% year-over-year increase — simply astounding for a company of this size.” (Wall Street loves these five AI stocks.)

If AI revenue continues to grow across thousands of companies and tens of millions of people (or more) that use it, Nvidia’s position at the center of AI will only grow. Nvidia stock could outperform other megacaps for a very long time.

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