The Nvidia Riddle

While Nvidia saw its revenue and profit grow at an extraordinary pace over the past year, it is still far from the levels that its fellow $3+ trillion companies Apple and Microsoft have been consistently reporting for the past few years.

Nvidia revenue for the past four completed fiscal quarters adds up to $96.3 billion. That’s a quarter of Apple’s revenue for the comparable time frame and roughly 40 percent of Microsoft’s.

In terms of profit, Nvidia is already closer to its fellow market cap heavyweights with its $53 billion in net income in the trailing twelve months equivalent to 52 percent of Apple’s profit and 60 percent of Microsoft’s net income.

Where Nvidia sets itself apart is a) its gross margin of 75 percent in the most recent quarter (46 percent for Apple and 70 percent for Microsoft) and, most importantly, its current growth.

Compared to the same 12-month period a year earlier, Nvidia’s revenue grew 195 percent in the four most recent quarters, compared to 0.4 percent growth for Apple and Microsoft’s 16 percent growth. For Q3, however, Nvidia’s expectation for growth is slower – it forecasts revenues of $32 billion compared to Q2’s $30 billion.