Tag: Automation

1. Introduction to NVIDA as Company

NVIDIA Corporation, founded in 1993 by Jensen Huang, Chris Malachowsky, and Curtis Priem, has transformed the tech landscape with its relentless innovation. Headquartered in Santa Clara, California, the company is renowned for pioneering graphics processing units (GPUs) that power everything from video gaming to artificial intelligence (AI) and data centers.The efficiency of accelerated computing.

As of 2025, NVIDIA holds a commanding position in the semiconductor industry. The company’s stock (NVDA) has seen significant growth, driven by demand for GPUs in AI and gaming. Despite facing competition from AMD, Intel, and emerging players, NVIDIA has maintained its edge through innovation and strategic acquisition

Challenges persist, including supply chain disruptions and regulatory scrutiny, especially after the failed acquisition of ARM due to antitrust concerns. Nevertheless, NVIDIA continues to diversify its portfolio, ensuring long-term resilience.

A Legacy in Gaming

The company’s journey began with a groundbreaking achievement in gaming technology, introducing the GeForce 256 in 1999, the world’s first GPU. This innovation revolutionized gaming by delivering real-time 3D rendering and setting new standards for graphical fidelity. Over the years, NVIDIA’s GeForce GPUs have remained dominant in the gaming industry, constantly pushing the boundaries of performance and visual quality.

Technologies like ray tracing and DLSS (Deep Learning Super Sampling) have further enhanced gaming experiences, offering realistic lighting and shadows while optimizing performance.

NVIDIA has also contributed significantly to gaming hardware through innovations like G-SYNC, which ensures smooth gameplay by eliminating screen tearing. Additionally, the company has embraced the future of gaming with GeForce NOW, a cloud-based platform that enables high-end gaming experiences on a variety of devices.

Illustration 1: The Logo of NVIDIA, an eye symbolizing constant innovation.

The AI Revolution

While NVIDIA’s roots lie in gaming, its impact on artificial intelligence has been transformative. GPUs, initially designed for rendering images, have proven to be highly efficient for parallel processing tasks required in AI and machine learning. NVIDIA’s CUDA (Compute Unified Device Architecture) platform opened the door for researchers and developers to harness GPU power for tasks like neural network training.

The launch of the NVIDIA DGX systems and A100 Tensor Core GPUs has positioned the company as a leader in AI infrastructure. These technologies are integral to advancements in autonomous vehicles, robotics, natural language processing, and more. NVIDIA’s AI-driven technologies are used by companies across industries, from healthcare to finance, enabling breakthroughs in fields like drug discovery and fraud detection.

Data Centers and the Cloud

NVIDIA has expanded its reach beyond gaming and AI into data centers and cloud computing. The acquisition of Mellanox in 2020 strengthened NVIDIA’s position in networking and high-performance computing. NVIDIA’s GPUs are now at the heart of data centers worldwide, accelerating workloads for cloud providers, enterprises, and research institutions.

The company’s software platforms, including NVIDIA Omniverse and NVIDIA AI Enterprise, enable collaboration and innovation across industries. Omniverse, a 3D simulation and collaboration platform, is particularly promising in fields like virtual production, architecture, and design.

Automotive Innovation

NVIDIA is also a key player in the race toward autonomous vehicles. Its DRIVE platform offers end-to-end solutions for self-driving cars, providing everything from AI computing hardware to simulation tools. Partnerships with major automakers and startups demonstrate NVIDIA’s commitment to reshaping transportation with safer and more efficient systems.

Supercomputing

Nvidia is at the forefront of supercomputing. Its DGX systems combine the power of multiple high-performance GPUs to create supercomputers that drive some of the world’s most significant scientific discoveries. These systems are used in diverse areas like climate modeling, genomics, and physics simulations.

In addition, Nvidia’s acquisition of Mellanox Technologies in 2020 expanded its portfolio into high-speed networking, further enhancing its capabilities in supercomputing and AI. By providing end-to-end infrastructure solutions, Nvidia has positioned itself as a key player in the future of high-performance computing.

Illustration 2: A NVIDIA GPU (Graohic Processing Unit), one of the products NVIDIA is famous for.

2. Stock Analysis

In this section we will analyze NVIDIA stock to see if it is a good stock to buy or not. Our philosophy is value investing meaning that we try to find good quality companies that are undervalued. However, we will give a holistic overview so all kind of investors with different philosophies can judge the stock for themselves.

Revenue and Profits

To determine a company’s worth and if it is worth investing in, the company’s revenue and profits are a natural starting point to analyze. It should never bee forgotten that a stock represents a company just like the small companies in your home town. If the local barber asked if you wanted to by her hairsalone, your first question would naturally be how much does this barber shop make in profits and what is its debt. Furthermore, you want to research how it’s result have been over the years to make sure that the recent profits are not part of a downwards trend or just outliers.

Illustration 3 and 4: The revenue graph of NVIDIA from 2009 to 2024.

As illustrated in the graph above, NVIDIA’s gross revenue has shown a clear upward trend. With an earnings growth rate of 24.5%, the company is experiencing rapid expansion. While past performance does not guarantee future growth, most analysts anticipate continued revenue increases, particularly given NVIDIA’s involvement in high-growth sectors such as data centers, AI, and gaming. The revenue of NVIDIA is a clear positive sign and indicates that this is a company to be invested in since it’s revenue has continuely grown for the past years and there are no indications that this will slow down.

Illustration 5 and 6: The Net Income of NVIDIA from 2009 to 2024

Net income is a crucial metric to evaluate when determining whether a company is a worthwhile investment. It represents a company’s net profit or loss after accounting for all revenues, income items, and expenses, calculated as Net Income = Revenue – Expenses.

As illustrated in Figures 5 and 6, NVIDIA’s net income has shown a consistent upward trend, demonstrating steady growth. The company has been profitable since 2011 and has continuously increased its earnings, despite a few outliers in 2020 and 2023. Overall, NVIDIA’s net profit from 2009 to 2024 presents a strong case for potential investors, as it reflects a company that is both profitable and has exhibited sustained net income growth over the past 15 years.

Revenue Breakdown

Illustration 7: NVIDIA Revemue breakdown, gathered from and made by App Economy Insights at appeconomyinsights.com

As illustrated in illustration 7, NVIDIA has many different sources of revenue including from Data Centers, Gaming industry, professional visualization, automotive and OEM. However, the two largest revenue streams comes from Data Centers and gaming, especially data centers account alone for 47,5 % while gaming account for 10,4 %.

nderstanding this revenue distribution allows investors to assess NVIDIA’s resilience, growth potential, and exposure to key industries. With AI and cloud computing experiencing rapid expansion, NVIDIA’s strong presence in data centers positions it well for sustained long-term growth.

Dividend

For potential investors, it is important to note that NVIDIA’s dividend policy reflects a company that returns very little cash to shareholders. While this might typically be seen as a negative indicator for many companies, it does not necessarily signal a drawback in NVIDIA’s case.

Fast-growing companies often choose not to pay significant dividends, instead reinvesting their profits into expansion and innovation. NVIDIA follows this strategy, demonstrating confidence in its long-term growth potential. Rather than distributing earnings to shareholders, the company prioritizes strengthening its leadership in high-growth industries such as AI, gaming, and data centers.

This reinvestment strategy suggests that NVIDIA is committed to accelerating its competitive edge and maintaining its market dominance. The combination of minimal dividends and strong stock price appreciation makes NVIDIA particularly appealing to growth-oriented investors who prioritize long-term capital gains over immediate income. While income-focused investors may look elsewhere, those seeking exposure to a rapidly expanding technology leader may find NVIDIA an attractive addition to their portfolios.

Assets & Liabilities

Illustration 8 and 9: The total assets and liabilities of NVIDIA.

When evaluating a company as a potential investment, understanding its assets and liabilities is crucial. If a local barber offered to sell their shop, one of the first questions you would ask—after determining revenue and profit—would be about the business’s debt and the value of its assets. The same principle applies when assessing publicly traded companies like NVIDIA.

As shown in Illustrations 8 and 9, NVIDIA’s total assets have demonstrated a consistent upward trend, increasing from $3,351 million in 2009 to $65,728 million in 2024. A significant portion of these assets consists of cash on hand, which includes cash deposits at financial institutions and highly liquid short-term investments maturing within a year. This strong liquidity position means that NVIDIA is well-equipped to handle economic downturns or unforeseen crises, ensuring financial stability and the ability to seize new investment opportunities when needed.

As NVIDIA has grown, its total liabilities have also increased, which is a natural occurrence for expanding companies. However, a particularly notable feature in NVIDIA’s financials is the decline in long-term debt from 2022 to 2024. This reflects the company’s strong financial position, as it has been able to reduce its long-term obligations while continuing to grow.

The most important indicator when assessing a company’s financial health is Total Shareholder Equity, which is calculated as: Total Shareholder Equity=Total Assets−Total Liabilities.

This metric represents the company’s net worth, and if it is increasing, it signals that the company is becoming more valuable over time. As seen in Illustration 9, NVIDIA’s shareholder equity has grown from $2,395 million in 2009 to $42,978 million in 2024, a strong indication of financial strength and sustained growth.

Over the past 15 years, NVIDIA has built a solid financial foundation with steadily increasing assets, declining long-term debt, and strong shareholder equity growth. The company’s significant cash reserves further reinforce its ability to navigate potential economic challenges. With assets far exceeding liabilities, NVIDIA is in an exceptionally strong financial position, making it an attractive investment for those seeking stability and long-term growth.

Illustration 10: Earning per Share of NVIDIA from 2009 to 2024

Other key financial metrics also highlight NVIDIA’s strong financial health and positive development. One of the most important indicators of a company’s profitability is Earnings Per Share (EPS), which measures how much profit is allocated to each outstanding share of common stock. Investors and analysts use EPS to gauge a company’s financial performance and growth potential.

As illustrated in Figure 10, NVIDIA’s EPS has shown a clear upward trend from 2009 to 2015 and has remained consistently positive since 2011. This sustained growth in EPS signals that NVIDIA is generating increasing profits per share, reinforcing its strong financial position and solid profitability.

For investors, a rising EPS is generally considered a green flag, as it indicates that the company is successfully growing earnings while maintaining financial stability. NVIDIA’s positive EPS trajectory supports the case for its long-term growth potential, making it an attractive prospect for investors looking for profitable and well-managed companies.

Illustration 11 and 12 : Debt to equity ratio of NVIDIA from 2009 to 2024

The Debt-to-Equity (D/E) ratio is a key financial metric used to assess a company’s financial leverage and risk. It measures how much debt a company uses to finance its operations relative to shareholder equity. A high D/E ratio (greater than 1.0) suggests that the company relies heavily on debt financing, which can amplify financial risk, particularly during economic downturns when debt obligations may become more difficult to manage. In contrast, a low D/E ratio (below 1.0) indicates that the company is primarily financed through equity rather than debt, reducing financial risk but potentially limiting rapid expansion. A negative D/E ratio, on the other hand, signals that a company has more liabilities than equity—often considered a warning sign for investors.

Legendary value investors like Warren Buffett favor companies with a D/E ratio below 0.5, meaning they have at least twice as much equity as debt. Buffett avoids companies with excessive debt since high interest payments can erode profits, particularly in periods of economic instability. Additionally, he prioritizes businesses that maintain a stable or declining D/E ratio over time rather than those that take on large amounts of debt unexpectedly.

As illustrated in Figures 11 and 12, NVIDIA’s D/E ratio has remained consistently low and has now fallen below 0.5—a remarkable achievement for a high-growth company. Typically, growth-oriented firms rely on significant debt to finance rapid expansion, but NVIDIA has managed to grow without overleveraging itself. Furthermore, the company has never recorded a negative D/E ratio, reinforcing its financial stability and making it an attractive option for risk-conscious investors.

Price to earnings ratio

Illustration 12 and 13: The P/E ratio of NVIDIA

For value investors, the most important metric when evaluating a stock is the price-to-earnings (P/E) ratio, which helps determine whether a company is undervalued or overvalued. Even if a company has outstanding financials, buying its stock at an excessively high price can lead to poor returns. To illustrate this, imagine a local barber shop that generates solid profits. If the owner offers to sell you the business for $1, it would be an incredible deal. However, if he tries to sell it for $1 billion, no matter how successful the shop is, the price would be absurdly overvalued. The stock market operates in a similar way—companies can be cheaply priced on some days and highly expensive on others.

Currently, NVIDIA has a P/E ratio of 52.24, which is considered very high. To put this into perspective, legendary value investor Warren Buffett typically considers stocks with a P/E ratio of 15 or lower to be “bargains.” A high P/E ratio suggests that investors are paying a premium for the company’s earnings, potentially expecting significant growth. However, it also means that the stock is far more expensive compared to its earnings, which can be a red flag for value investors. The elevated P/E ratio of 52.24 indicates that NVIDIA is trading at a premium and may be overpriced based on traditional valuation metrics. This could pose a risk for investors, as the stock might struggle to sustain such high expectations. If NVIDIA fails to deliver on its projected growth, the stock price could face significant downward pressure.

While NVIDIA is a strong and innovative company, value investors may hesitate to buy at these valuation levels. Buying stocks at the right price is just as important as picking the right companies. At a P/E ratio this high, NVIDIA may not fit within a classic value investor’s strategy and could be considered overvalued in the current market.

Insider Trading

A crucial metric to consider when evaluating whether a company is worth investing in is insider trading activity—specifically, whether company insiders have been buying or selling shares over the past year. It’s particularly important to assess who has been trading, as directors should be monitored even more closely than officers.

As shown below, there has been significant insider selling, which is a major red flag. Notably, this selling includes transactions from directors and even the CEO, raising serious concerns. Such activity could indicate that insiders anticipate weaker financial performance, expect the stock price to decline, or believe the stock is overvalued—a concern that aligns with the valuation analysis above.

If those inside the company lack confidence in its future, why should outside investors? See Illustration 14 below for a detailed record of the latest insider transactions.

Illustration 14: Full list of all newest insider trades by NVIDIA officials.

Other Company Info

As illustrated below, NVIDIA currently have 29,6 thousands employees which showcases the company’s huge growth as it only had 8,8 thousands employees in 2014. The company itself was founded in 1993, it has the ticker NVDA and is listed on the NasdaqGS exchange. Its industry is officially semiconductors and it has 24.49 billion shares outstanding.

NVIDIA’s headquarters are at 2788 San Tomas Expressway, Santa Clara, California, 95051, United States of America as can be seen below-

Illustration 15-17: Number of employees at NVIDIA and its location.

Final Verdict

In conclusion, NVIDIA is a solid company with impressive growth potential, operating in high-demand sectors such as data centers, AI, and automation, all of which are poised for substantial expansion in the coming years. The company has consistently demonstrated its ability to grow, backed by a strong historical earnings record. Its financials are robust, with ample assets and cash reserves, and its shareholder equity remains positively strong. Additionally, its EPS is healthy, reflecting solid profitability.

That said, for value investors, I would caution against purchasing NVIDIA stock at this time. The stock appears overvalued based on current market conditions. Moreover, there is a significant amount of insider selling, which raises concerns. This selling could indicate that insiders believe the stock is overpriced and are capitalizing on the opportunity, or it could suggest underlying factors that are not yet publicly known but might signal potential risks ahead.