Technology Giants in the Race: Nvidia vs. Amazon

The significance of market capitalization as an indicator of a company's market valuation is widely recognized. It reflects the ratio of stock price to the number of shares but does not consider the actual performance or future prospects of a company. Especially for newer companies, market capitalization may be lower as they often lack a growth boost. This involves a mix of investor confidence and a proven track record. Nvidia has experienced an impressive 250% increase in stock price over the past twelve months, catapulting it to the top of companies with the highest market capitalization. The company greatly benefits from the boom around generative artificial intelligence (AI) and the high demand for its graphic processors (GPUs). This success story is reflected in outstanding revenue figures and profit growth. Nevertheless, the question remains whether competitors can catch up. Amazon, a significant client of Nvidia that is also developing its own chips, could establish itself as a serious competitor in the AI sector. With revenue surpassing that of Nvidia, Apple, and Microsoft, Amazon remains in fifth place among the most valuable companies—significantly behind Nvidia, which has nearly reached $3.5 trillion, while Amazon stands at almost $2 trillion. However, Amazon could regain ground in the long term. Amazon's advances in artificial intelligence are particularly promising, even though they currently represent only a small portion of the gigantic company. Amazon’s dominant position in the U.S. e-commerce market, which contributes over a third of its revenue, forms the solid foundation of the company. This market segment is likely not only to be defended but even expanded. Improved logistics structures, faster delivery times, and a broader product range strengthen the loyalty of Prime members and contribute to revenue growth. The trend in e-commerce growth also surpasses that of brick-and-mortar retail, providing Amazon with further organic growth. Generative AI, as a new component of Amazon Web Services (AWS), brings additional momentum. AWS is developing numerous services to address customer needs in all areas and offers economic alternatives to competitor Nvidia with its own chips. As a market leader in cloud computing, AWS significantly contributes to the company's operating profit.