Nvidia Corp. has just given the world the details of its historic financial year. Its reward: Expectations that the chip maker will accomplish something that has never been done before.
When Nvidia
NVDA,
wrapped up its fiscal year with an earnings report last week, the astounding numbers sent the stock to records and boosted indexes to their own all-time highs. The market capitalization of the company is hovering around $2 trillion and its stock has increased by nearly 1,900% in the last five years.
But if you think closely about a few of the numbers that were included in Nvidia’s recent financial report, you will realize just how incredible Nvidia’s last financial year turned out. It really is one for the record books.
Nvidia in its 2024 fiscal year produced profit of $29.76 billion, a feat in and of itself. But that number is even more mind-blowing when compared with Nvidia’s past performance: The chip maker had never produced an annual revenue total that high in its 25 years as a public company, with sales topping out the previous year at $26.97 billion.
The Dow Jones Market Data team crunched the data on those 25 years and discovered that no company had ever accomplished that feat at Nvidia’s scale. Since 1999, nearly 300 companies had produced profits that were higher than any previous revenue total, but most were much smaller companies that produced profit of less than $1 billion in their record years.
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Previously, the highest profit total that exceeded any previous revenue total belonged to Moderna Inc.
MRNA,
The vaccine maker produced profit of $12.2 billion in 2021 after introducing its COVID-19 vaccine, but that profit was less than half of what Nvidia put up last year. Only three other companies surpassed $10 billion in accomplishing the feat: Another vaccine maker, BioNTech SE
BNTX,
in 2021; Gilead Sciences
GILD,
in 2014, thanks to Sovaldi; and Charter Communications Inc.
CHTR,
in 2009, which was largely a paper profit that resulted from exiting a bankruptcy exit.
There is a chance that Nvidia’s record doesn’t stand for long, because it could fall just this year. But it would be Nvidia that breaks it — after putting up sales of $60.9 billion last year, Wall Street expects profit of nearly $56 billion this year. And analysts’ projections have steadily come in lower than Nvidia’s actual performance in recent quarters.
Those earnings expectations stand out in another way, though. After last week’s blowout earnings report, analysts’ forecasts increased to the point that Wall Street now expects Nvidia to surpass $100 billion in revenue this year, a barrier even Intel Corp.
INTC,
has never broken.
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When we put the revenue and profit expectations together, something stands out — the margin. Wall Street expects Nvidia to take home more than 50 cents of every dollar it collects in net income this year, which would establish a record that doesn’t need the “at that scale” qualifier.
Dow Jones Market Data combed through financial records dating back to 1999, and found no companies that have ever produced $100 billion in revenue with a net profit margin greater than 50%. If Nvidia lives up to — or beats — Wall Street’s expectations, it would be the first company to ever accomplish that feat.
For more on how Nvidia reached this point, and what it means for the market, listen to this week’s On Watch by MarketWatch podcast.
Check out On Watch by MarketWatch, a weekly podcast about the financial news we’re all watching, and how it affects your wallet. MarketWatch’s Jeremy Owens trains his eye on what’s driving markets and offers insights that will help you make more informed money decisions. Subscribe on Spotify and Apple.
