NVIDIA (NVDA) could be the world’s most lucrative company. Its revenues grew by an astonishing 205.51% in the quarter ending on 31 October 2023.
NVIDIA’s quarterly revenues grew from $5.931 billion on 31 October 2022 to $18.120 billion on 31 October 2023. Similarly, NVIDIA’s quarterly gross profit grew from $3.177 billion on 31 October 2022 to $13.40 billion on 31 October 2023. Plus, the quarterly operating income grew from $601 million on 31 October 2022 to $10.417 billion on 31 October 2023.
Therefore, I think Mr. Market accurately priced NVIDIA’s stock at $481.10 on 29 November 2023. Mr. Market has noticed NVIDIA’s success. The share price grew from $156.39 on 29 November 2022.
Consequently, I think NVIDIA is one of the best growth stocks in today’s market. Meanwhile, value investors will wonder how much money is NVIDIA making?
How Much Money is NVIDIA (NVDA) making?
NVIDIA (NVDA) is generating enormous amounts of cash. Its quarterly operating cash flow grew from $392 million on 31 October 2022 to $7.332 billion on 31 October 2023.
However, the quarterly ending cash flow was -$363 million on 31 October 2023. The quarterly ending cash flow hit a high of $5.079 billion on 30 April 2023.
Predictably, NVIDIA has more cash. Its cash and short-term investments grew from $13.143 billion on 31 October 2022 to $18.281 billion on 31 October 2023. Similarly, the total assets grew from $40.488 billion on 31 October 2022 to $54.148 billion on 31 October 2023. Meanwhile, the total debts fell from $10.95 billion to $8.457 billion in the same period.
How NVIDIA profits from Big Data
Thus, many people will argue that NVIDIA (NASDAQ: NVDA) is currently the world’s most lucrative company. NVIDIA has become the world’s most lucrative company because it sells some of the most sought-after products graphics processor units (GPUS).
I think NVIDIA’s revenue growth proves the claim “data is the new oil.” To explain, NVIDIA generates most of its revenue by selling GPUs to data centers.
For example, NVIDIA made $14.514 billion selling GPUs to data centers in the quarter ending on 31 October 2023. Plus, NVIDIA made $2.856 billion selling gaming GPUS in the same period.
Thus, data centers, not gamers, are NVIDIA’s primary market. Hence, NVIDIA is profiting from the growth of Big Data. Tom’s Hardware estimates NVIDIA’s grew by 279% between 31 October 2022 and 31 October 2023.
How NVIDIA profits from AI
NVIDIA CEO Jensen Huang attributes much of the growth to artificial intelligence. “Our strong growth reflects the broad industry platform transition from general-purpose to accelerated computing and generative AI,” Huang said in NVIDIA’s last earnings call.
I consider AI part of Big Data. Thus, Big Data is the primary driver of NVIDIA’s profits.
Demand for both AI and data is growing fast. Huang says NVIDIA has sold supercomputers to 50 of America’s 100 largest countries in 2023, The New Yorker notes. Hence, Huang’s 2006 bet on super-computing and AI is paying off big time.
If you are interested in an all-American success story checkout Stephen Witt’s New Yorker story about Huang. The NVIDIA billionaire came to America as an immigrant boy who lived at a Baptist reform school. Plus, Huang and partners started NVIDIA at the same Dennys where the CEO once worked as a busboy.
Huang is modest. He still eats Denny’s breakfasts and seems to always wear the same leather jacket. Thus, Huang could be the textbook example of Warren Buffett’s model CEO. Many people will wonder if Huang is America’s best CEO? Mr. Market thinks so.
How Far can Big Data Grow?
Big Data is growing fast. The global big data analytics market is worth $307.52 billion in 2023, Fortune Business Insights estimates. The global big data analytics market grew from $271.83 billion in 2022.
Moreover, the global big data analytics market could grow to $745.15 billion by 2030 Fortune Business Insights projects. Plus, the North American Big Data Analytics market grew from $90.07 billion in 2021 to $101.06 billion in 2022. I think this growth is driving NVIDIA’s profits.
Similarly, the worldwide artificial intelligence market grew from $134.89 billion in 2022 to $241.80 billion in 2023, Statista estimates. The global AI market could grow to $305.91 billion in 2024, $370.22 billion in 2025, $445.96 billion in 2026, $511.33 billion in 2027, $584.84 billion in 2028, $659.53 billion in 2029, and $738.76 billion 2030.
The largest segment of AI is machine learning, teaching tasks to algorithms. The global machine learning market was worth $158.80 billion in 2023, Statista estimates. This worldwide machine learning market could grow to $204.30 billion in 2024 and $528.10 billion in 2030.
NVIDIA profits from machine learning’s growth because you need GPUs to run machine learning programs and algorithms.
Is NVIDIA (NVDA) a Value Investment?
I do not consider NVIDIA (NVDA) a value investment because of its $4801040 share price.
However, I think NVIDIA is a wonderful stock because of its growth and dividend. For example, NVIDIA has scheduled nine 4₵ quarterly dividends between 28 December 2023 and 22 December 2025. NVIDIA shares offered a 16₵ forward dividend and a 0.03% dividend yield on 28 November 2023.
Skeptics will wonder why NVIDIA’s dividend is so small. I imagine activist investors will demand an increase in NVIDIA’s dividend. The company can afford it. I think a $1 dividend is certainly justifiable because of NVIDIA’s profits. A $2 or even $5 dividend could be possible if NVIDIA’s growth continues.
If you are a seeking lucrative stock that can profit from the growth of Big Data and Artificial Intelligence. NVIDIA is it. I predict NVIDIA’s growth will continue for the foreseeable future.
*https://www.newyorker.com/magazine/2023/12/04/how-jensen-huangs-nvidia-is-powering-the-ai-revolution
*https://www.fortunebusinessinsights.com/big-data-analytics-market-106179
*https://www.statista.com/outlook/tmo/artificial-intelligence/worldwide#market-size
 the World’s Most Lucrative Company?){kind=link}