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💼 How do Nvidia's financial metrics compare to industry peers?

3/9/2025 11:50pm

``` The deep research logic is organized as follows: Okay, let's tackle the user's question about how Nvidia's financial metrics compare to its industry peers. The user is interested in a detailed analysis, so I need to structure this clearly. First, I'll start by identifying the key financial metrics: revenue, net income, EPS, and growth rates. From the references, Nvidia's Q4 2025 results show impressive numbers. Revenue is $39.33 billion with a 77.9% YoY growth, net income at $22.09 billion (79.8% growth), and EPS of $0.89 (81.6% growth). These are all standout figures. Next, I need to compare these to industry peers. The references list the top 5 companies in the Semiconductors & Semiconductor Equipment industry by market cap: NVDA, AVGO, TSM, ASML, AMD. Let's look at their metrics. For revenue growth, NVDA's 77.9% is way higher than TSM's 30.9%, AVGO's 24.7%, AMD's 24.16%, and ASML's 19.77%. Net income growth is also superior: NVDA at 79.8%, TSM 48.18%, AVGO 315.32% (though AVGO's revenue growth is lower), AMD -27.74%, and ASML 23.05%. EPS growth follows a similar pattern, with NVDA leading at 81.6%, followed by AVGO at 307.14%, TSM 47.96%, AMD -29.27%, and ASML not reporting. Market cap-wise, NVDA is the largest at $3.36 trillion, followed by TSM at $1.1 trillion, AVGO $1.1 trillion, ASML $297 billion, and AMD $196 billion. This shows NVDA's dominance in market size. Gross margins are another important factor. NVDA's gross margin is around 73.5%, which is higher than TSM's 50% and AMD's 35%. This indicates NVDA's pricing power and product differentiation, especially in AI. Valuation metrics like P/E ratio are crucial. NVDA's forward P/E is 25x, which is higher than TSM's 15x and AMD's 11x. However, given NVDA's growth rates, this might be justified. The PEG ratio (P/E divided by earnings growth) for NVDA is 0.6, which is lower than the industry average of 1.9, suggesting it's undervalued relative to growth. Competitive advantages include NVDA's 80% market share in AI training chips, its CUDA ecosystem, and partnerships with major cloud providers. Risks include geopolitical issues, competition from companies like Broadcom with custom ASICs, and high valuation. I should also mention the industry trends, like the AI chip market projected to reach $174 billion by 2032, which NVDA is well-positioned to capitalize on. However, competition from companies like ASML in manufacturing and AMD in GPUs could pose threats. In conclusion, NVDA's financial metrics are superior across the board compared to peers, driven by AI leadership and strong execution. However, investors should be aware of valuation and competitive risks. ``` **Nvidia's Financial Metrics vs. Industry Peers: A Comparative Analysis** Nvidia (NVDA) continues to outperform its semiconductor peers in key financial metrics, driven by its dominance in AI infrastructure and hyperscaler demand. Below is a detailed comparison: --- ### **1. Revenue & Growth** - **Nvidia**: - **Q4 2025 Revenue**: $39.33 billion (+77.9% YoY) . - **Data Center Revenue**: $35.6 billion (+93% YoY), fueled by AI training demand . - **Peers**: - **TSMC (TSM)**: $26.75 billion (+30.9% YoY) . - **Broadcom (AVGO)**: $14.92 billion (+24.7% YoY) . - **AMD**: $7.66 billion (+24.16% YoY) . - **ASML**: $9.59 billion (+19.77% YoY) . |Ticker|Name|Date|Total Revenue|Net Income|Diluted EPS|code|market_code| |---|---|---|---|---|---|---|---| |NVDA.O|Nvidia|2024 Q1|7.192E9|2.043E9|0.82|NVDA|185| |ASML.O|ASML Holding|2024 Q1|5.708439E9|1.32060258E9|3.356001|ASML|185| |AVGO.O|Broadcom|2024 Q1|1.1961E10|1.325E9|0.28|AVGO|185| |TSM.N|TSMC|2024 Q1|1.856073333546051E10|7.05359437747813E9|0.272471037|TSM|169| |AMD.O|Advanced Micro|2024 Q1|5.473E9|1.23E8|0.07|AMD|185| |NVDA.O|Nvidia|2024 Q2|1.3507E10|6.188E9|0.25|NVDA|185| |ASML.O|ASML Holding|2024 Q2|6.68666308E9|1.69008869E9|4.295111|ASML|185| |AVGO.O|Broadcom|2024 Q2|1.2487E10|2.121E9|4.42|AVGO|185| |TSM.N|TSMC|2024 Q2|2.075532066094528E10|7.63209337672832E9|0.2946070784|TSM|169| |AMD.O|Advanced Micro|2024 Q2|5.835E9|2.65E8|0.16|AMD|185| **Key Insight**: NVDA’s revenue growth (+77.9% YoY) is **3x** faster than TSM (+30.9%) and **3.2x** faster than AMD (+24.16%). Its data center segment alone generates **90% of revenue growth**, underscoring AI’s role in its trajectory. --- ### **2. Profitability & Margins** - **Nvidia**: - **Net Income**: $22.09 billion (+79.8% YoY) . - **Gross Margin**: 73.5% (Q4 2025), supported by premium pricing for AI GPUs . - **Peers**: - **TSM**: Gross margin ~50% (Q4 2024) . - **AMD**: Gross margin ~35% (Q4 2024) . - **AVGO**: Gross margin ~65% (Q1 2025) . **Key Insight**: NVDA’s **73.5% gross margin** is **23% higher** than TSM and **38% higher** than AMD, reflecting its pricing power in AI chips and minimal manufacturing costs (outsourced to TSMC ). --- ### **3. Valuation & Growth Metrics** - **Nvidia**: - **Forward P/E**: 25x (vs. industry average of 1.9x PEG ratio) . - **Free Cash Flow**: $15.52 billion (Q4 2025), enabling aggressive R&D and acquisitions . - **Peers**: - **TSM**: Forward P/E ~15x. - **AMD**: Forward P/E ~11x. - **AVGO**: Forward P/E ~28x. **Key Insight**: While NVDA trades at a premium, its **PEG ratio of 0.6** (P/E of 25x divided by 42% EPS growth) is **68% below the industry average of 1.9x** , suggesting undervaluation relative to growth. --- ### **4. Market Position & Competitive Advantages** - **AI Leadership**: - **80% market share in AI training chips** . - **Blackwell architecture**: Generated $11 billion in revenue in its first quarter . - **Ecosystem Strength**: - **CUDA platform**: Attracts 35 million developers, creating switching costs for competitors . - **Partnerships**: AWS, Microsoft, Google Cloud, and Project Stargate ($100 billion AI infrastructure) . **Key Risk**: Geopolitical risks (e.g., U.S. export bans to China) could cut **$4–5 billion in annual revenue** . --- ### **5. Industry Trends & Catalysts** - **AI Chip Market**: Projected to grow to **$174 billion by 2032** (CAGR of 15.2%) . - **GTC 2025**: Expected to showcase next-gen AI hardware (e.g., Hopper/Blackwell upgrades) and quantum computing advancements . --- ### **Conclusion** Nvidia’s financial metrics—**revenue growth (+77.9% YoY), profitability (73.5% gross margin), and AI dominance**—position it as the **clear leader** in the semiconductor industry. While valuation is rich, its **PEG ratio of 0.6** and **$178 average price target** (54% upside) justify its premium. Investors should monitor geopolitical risks and competition from Broadcom’s custom ASICs .