Does NVDA meet the requirements for Warren Buffett?

Nvidia does not meet the criteria for Warren Buffett's investment strategy. Here's why:

1. High Growth and Volatility: Nvidia's financials show a significant year-over-year revenue growth rate of 122.4%, which is indicative of a high-growth and potentially volatile stock. This rapid growth could be interpreted by Buffett as a sign of a company that may be overvalued or that its growth is not sustainable in the long term.

2. Economic Moat: While Nvidia has a strong competitive advantage in the GPU industry, its products are not as unique as those of companies like Coca-Cola, which Buffett has been known to invest in. The economic moat is not as wide, and the competition is intense, which could lead to pricing pressures and reduced margins over time.
3. Profit Margins: Nvidia's net profit margins have shown a significant increase, reaching 57.14% by June 2025. However, this high margin could be a result of one-time gains or strategic decisions, and it may not be sustainable in the long term. Buffett typically looks for companies with a good profit margin that can grow and control costs year over year.

4. ROE: Nvidia's ROE has fluctuated, with a peak of 91.46% by December 2024, which is an impressive figure. However, it is also highly variable, which could be a sign of a company that is not consistently generating high returns on equity.

In conclusion, while Nvidia is a strong performer in the tech sector, it does not meet the criteria of being a low-cost provider of essential goods or services, having a unique product, or demonstrating consistent profitability over a long period, which are key factors that Warren Buffett considers when making investment decisions.