Nvidia stock experienced a slight drop in premarket trading on Thursday, following a record-breaking closing high the previous day. With its recent rally, the chip maker is now on the verge of surpassing Amazon in terms of market value.
The stock opened with a 0.7% decrease at $696.43. However, it had closed at an impressive $700.99 on Wednesday, marking a new record closing high.
According to FactSet, Nvidia’s market value reached approximately $1.73 trillion at the close of Wednesday’s trading session, placing it in close proximity to Amazon’s $1.78 trillion valuation. Over the past few months, Nvidia has been steadily narrowing the gap between its market value and that of the e-commerce giant. As per FactSet, Nvidia trades at a forward price-to-earnings multiple of about 33 times, while Amazon has a multiple of 40 times.
In a research note published on Wednesday, analysts at Morgan Stanley raised their target price for Nvidia shares to $750, up from $603.
Investors in Nvidia may find encouragement in the recent performance of chip designer Arm Holdings. Arm reported earnings and an outlook that exceeded expectations in its own report on Wednesday. Arm’s management highlighted its progress in gaining market share in the cloud server and auto segments. Specifically, they mentioned Nvidia GH200 AI Superchip datacenter systems, which incorporate Arm technology and are set to launch soon.
In premarket trading, Arm’s American depositary receipts soared by 22%. Meanwhile, among Nvidia’s chip maker peers, Advanced Micro Devices saw a decrease of 0.8% and Intel experienced a minor decline of 0.1%.
Having witnessed a remarkable 28% increase over the past month, Nvidia shares have been outperforming both the S&P 500 (which rose by 4.5%) and the Nasdaq Composite Index (which rose by 5.2%) during the same period.
On Wednesday, Nvidia’s trading volume reached 49.6 million shares, surpassing its 65-day average of 43.3 million shares.