SuperworthNVIDIA Corporation NVDA
- Market cap
- $5.7T
- PE
- 30.0×
- 10y median 53.9×
- Forward PE
- Price to sales
- 18.9×
- EV/EBIT
- 28.6×
- Revenue, 12 months
- $303B
- +83% on a year ago
- Net margin
- 63.7%
- Free cash flow yield
- 2.2%
The stock went up five times and got cheaper
How earnings can outrun a share price
Start with the size
Three years ago NVIDIA was worth about 1.0 trillion dollars. Today it is 5.4 trillion. Hold that number. The rest of this explains how a company can quintuple and still end up on a lower multiple than it started.
Revenue did something unusual
Trailing twelve month revenue went from 45 billion to 303 billion dollars in three years. That is not a growth rate you normalise. It is close to seven times the business, at a size where most companies stop growing.
Profit grew faster than revenue
Earnings per share went from 0.77 to 7.95 dollars. Revenue grew about seven times, earnings about ten. The gap is margin: every extra dollar of sales arrived with more profit attached than the dollar before it.
Here is that margin
Net margin went from 32 percent to 64 percent, the highest in this window. Operating margin is 65 percent. Very few companies at any size earn this, and the chart cannot tell you whether it holds.
Which is why the multiple collapsed
The PE was 112 in October 2023 and is 28 today, the fourth percentile of its own three year range. The share price rose the entire time. Earnings simply rose faster, and the multiple is what gave way.
The same story in cash
Free cash flow went from 17 billion to 127 billion dollars a year. Earnings can be shaped by accounting choices. Cash of this size is harder to arrange, which is what makes the profit story credible.
What has happened lately
- NVIDIA, Nvidia adds $150 billion to its share repurchase authorization, bringing the remaining total to $235 billionNvidia expects to execute the full $235B through fiscal 2028, returning much of its cash flow and shrinking the share count that earnings are spread across.
- NVIDIA, Nvidia to acquire Hugging Face for about $12.9 billionNvidia's second-largest acquisition: about $11.9B cash plus up to $1B retention equity, expected to close in the first half of 2027 subject to regulatory approval.
- NVIDIA, Nvidia reports Q2 FY2027 revenue of $96.2 billion and guides Q3 to $108 billionRevenue up 106% at a 75.0% gross margin; Q3 guide of $108B plus or minus 2% at about 74% margin, with about $99B left under the repurchase authorization.
- Nikkei Asia, Nvidia to guarantee up to $105 billion of lease payments for OpenAI's Ohio data centerLarge contingent commitment plus a $1.5B stake in the developer, extending Nvidia's practice of financing the demand for its own chips.
Headlines link to the original source.
Charts
Financials
| Income statement | Q3 FY24 | Q4 FY24 | Q1 FY25 | Q2 FY25 | Q3 FY25 | Q4 FY25 | Q1 FY26 | Q2 FY26 | Q3 FY26 | Q4 FY26 | Q1 FY27 | Q2 FY27 |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| $18.1B | $22.1B | $26B | $30B | $35.1B+94% | $39.3B+78% | $44.1B+69% | $46.7B+56% | $57B+63% | $68.1B+73% | $81.6B+85% | $96.2B+106% | |
| Cost of revenue | $4.7B | $5.3B | $5.6B | $7.5B | $8.9B+89% | $10.6B+100% | $17.4B+209% | $12.9B+73% | $15.2B+70% | $17B+61% | $20.5B+18% | $24.1B+87% |
| Gross profit | $13.4B | $16.8B | $20.4B | $22.6B | $26.2B+95% | $28.7B+71% | $26.7B+31% | $33.9B+50% | $41.8B+60% | $51.1B+78% | $61.2B+129% | $72.1B+113% |
| R&D | $2.3B | $2.5B | $2.7B | $3.1B | $3.4B+48% | $3.7B+51% | $4B+47% | $4.3B+39% | $4.7B+39% | $5.5B+48% | $6.3B+59% | $7.1B+64% |
| SG&A | $689M | $712M | $777M | $842M | $897M+30% | $975M+37% | $1B+34% | $1.1B+33% | $1.1B+26% | $1.3B+32% | $1.3B+25% | $1.4B+21% |
| $10.4B | $13.6B | $16.9B | $18.6B | $21.9B+110% | $24B+77% | $21.6B+28% | $28.4B+53% | $36B+65% | $44.3B+84% | $53.5B+147% | $63.7B+124% | |
| Interest expense | $63M | $63M | $64M | $61M | $61M−3% | $61M−3% | $63M−2% | $62M+2% | $61M+0% | $73M+20% | $102M+62% | $227M+266% |
| Pre-tax income | $10.5B | $14.1B | $17.3B | $19.2B | $22.3B+112% | $25.2B+79% | $21.9B+27% | $31.2B+62% | $37.9B+70% | $50.4B+100% | $69.9B+219% | $71.5B+129% |
| $1.3B | $1.8B | $2.4B | $2.6B | $3B+135% | $3.1B+72% | $3.1B+31% | $4.8B+83% | $6B+100% | $7.4B+138% | $11.6B+269% | $11.8B+147% | |
| Net income | $9.2B | $12.3B | $14.9B | $16.6B | $19.3B+109% | $22.1B+80% | $18.8B+26% | $26.4B+59% | $31.9B+65% | $43B+95% | $58.3B+211% | $59.7B+126% |
| $0.37 | $0.49 | $0.60 | $0.67 | $0.78+111% | $0.89+82% | $0.76+27% | $1.08+61% | $1.30+67% | $1.76+98% | $2.39+215% | $2.46+128% | |
| 24.9B | 24.9B | 24.9B | 24.8B | 24.8B−1% | 24.7B−1% | 24.6B−1% | 24.5B−1% | 24.5B−1% | 24.4B−1% | 24.4B−1% | 24.3B−1% |
From each company's 10-Q and 10-K filings. Fiscal years are four fiscal quarters added up; balance sheet lines are as of the period's end. Growth is on the same period a year earlier.
Estimates
Next earnings report: .
Analyst consensus for the next eight quarters, with the range from the lowest to the highest estimate, is part of Superworth Pro.
Peers
Companies in Semiconductors within ten times NVIDIA's size, closest in size first.
| Company | Market cap | PE | Its 10y median PE | Fwd PE | P/S | Revenue growth | Net margin |
|---|---|---|---|---|---|---|---|
| NVDANVIDIA Corporation | $5.7T | 30.0× | 53.9× | 18.9× | +83% | 63.7% | |
| AVGOBroadcom Inc. | $1.8T | 48.1× | 44.4× | 20.2× | +49% | 42.9% | |
| MUMicron Technology, Inc. | $1.2T | 14.7× | 17.4× | 9.2× | +256% | 63.8% | |
| AMDAdvanced Micro Devices, Inc. | $1.1T | 166× | 109× | 25.5× | +40% | 15.6% | |
| Peer median | $1.2T | 48.1× | 44.4× | 20.2× | +49% | 42.9% |
About
- Chief executive
- Jensen Huang, since 1993FounderCo-founded NVIDIA in 1993 and has been CEO since. Source
- Industry
- Semiconductors
- Sector
- Technology
Valuation data, not investment advice. Prices as of .