May 23, 2024 - Business

Nvidia's astonishing profitability

The bar chart illustrates the first-quarter net income of selected companies, with Apple leading significantly, with $23.6 billion of earnings followed by Nvidia, with $14.9 billion. They're followed by JPMorgan, Berkshire Hathaway, Amazon, ExxonMobil, and TSMC. UnitedHealth reported a loss of $1.4 billion.
Data: FactSet; Chart: Axios Visuals

Nvidia, the primary avatar of the AI revolution, has solidly ensconced itself not only as one of the most valuable companies in the world but also as one of the most profitable.

Why it matters: Nvidia's profit margins are the envy of the corporate world — it made $14.9 billion of net income on revenue of $26 billion last quarter.

  • By contrast, Nvidia's net income was just $0.7 billion in the final quarter of 2022.

Between the lines: Nvidia earned more last quarter than corporate behemoths like JPMorgan, Berkshire Hathaway, or Amazon, all of which rank consistently among America's most profitable companies.

The big picture: The only U.S. companies to make substantially more money than Nvidia are Apple, Microsoft, and Alphabet.

  • Outside the U.S., state-owned oil companies Saudi Aramco and Petrobras can beat Nvidia — but Taiwanese chipmaking giant TSMC cannot.

The bottom line: It's not clear how long Nvidia can maintain its current level of profitability. But already it's setting records: Almost never in history has any company managed to increase its profits this quickly to such an astonishingly high level.

Go deeper: Nvidia's latest AI chip packs more than 200 billion transistors

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