Throughout the first few months of the year, the US stock market has had a tough go. However, macroeconomic pressures and geopolitical uncertainty haven’t stopped artificial intelligence from remaining at the forefront. Amid increased demand, there’s reason to think Amazon (AMZN) could eventually eclipse Nvidia (NVDA) by 2023 thanks to AI.
Both companies have remained at the forefront of the developing technology. For Amazon, it has used it to increase efficiency and greatly enhance its operations while strengthening its Amazon Web Services (AWS) business. Alternatively, Nvidia has become the chief chipmaker, strengthening the development of those products. Yet, could their positions flip over the next five years?
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Can Amazon Usurp Nvidia in Market Cap Over the Next Five Years?
Both Amazon and Nvidia have become some of the most valuable companies in the world. The two brands are leaders in the Magnificent 7 group while sitting as the third and fourth largest companies by market cap in the world. The question is, could their positions eventually flip?
Presently, NVDA has a market value of $2.7 trillion, dropping from the top spot it held last year. Alternatively, AMZN has a $2 trillion market value with the potential to increase. So, could a swap take place? Specifically, could Amazon eclipse Nvidia by the year 2030 thanks to AI?
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For Amazon, its usage of AI has greatly benefited AWS, its most profitable endeavor. The firm recently invested $8 billion in AI startup Anthropic, seeking to help propel its usage of the tech. In turn, the cloud-computing business saw its revenue reach $117 in Q1, with an operating margin reaching 39%.
Meanwhile, Nvidia may be struggling in the AI race. Specifically, companies like Amazon, Microsoft (MSFT), Meta Platforms (META), and Alphabet (GOOGL) are all exploring the creation of their own AI chips. If this were to become successful, it would massively threaten Nvidia’s impact on the market.
That reality will ultimately decide the stock’s fate. If it is able to successfully create its own AI chips that power its thriving businesses, it could certainly be headed for an evaluation well above the $3 trillion mark. Moreover, it could even be one of the firms eyeing the history-making position as the first to reach a $4 trillion value.