The foundation of business quality and long-term value creation
NVIDIA CORP's revenue and net income show pronounced, sustained growth in recent quarters, with the strongest acceleration beginning in mid‑2023. Revenue climbed steadily from $7.19B in 2023‑04 to $68.13B in 2026‑01, and net income rose from $2.04B in 2023‑04 to $42.96B in 2026‑01, with particularly large sequential gains in late 2025 and early 2026.
Notable inflection points include the acceleration that began in mid‑2023 and the pronounced jump between 2025‑10 (revenue $57.01B, net income $31.91B) and 2026‑01 (revenue $68.13B, net income $42.96B). One quarter of divergence occurred in 2025‑04 when net income fell to $18.77B from $22.09B in 2025‑01 despite revenue increasing to $44.06B; subsequent quarters resumed the upward trajectory. The most recent quarterly revenue was $68.13B. The most recent quarterly net income was $42.96B.
Why Growth Matters
Consistent revenue and earnings growth are the lifeblood of successful long-term investments. Companies that can grow their top line (revenue) and bottom line (net income) over many years demonstrate they have products or services customers value and are willing to pay for repeatedly.
Revenue Growth shows whether the company is expanding its market reach, gaining market share, or successfully launching new products.Net Income Growth demonstrates the company can convert that revenue into actual profits while managing costs effectively.
Look for steady, sustainable growth rather than erratic spikes. The best businesses compound earnings year after year, creating tremendous value for shareholders over time. Companies that can grow earnings faster than revenue are improving their profitability—a sign of operational excellence and competitive strength.
Year-over-year growth rates for revenue and earnings per share
Reading the Growth Rate Chart
This chart converts the absolute per-share figures into year-over-year percentage changes, making it easy to see whether growth is accelerating, decelerating, or reverting to trend — regardless of the company's absolute size.
Revenue per Share Growth (1-year, split-adjusted) measures how quickly the top line is expanding on a per-share basis. Sustained positive growth signals that the company continues to win customers and grow its addressable market.EPS Diluted Growth (1-year, split-adjusted) measures how quickly earnings are compounding for each shareholder. When EPS growth consistently outpaces revenue growth, operating leverage and margin expansion are at work.
Look for consistency, not just magnitude. A company that reliably grows EPS 10–15% per year is far more valuable than one that alternates between 50% spikes and deep contractions. Negative EPS growth during a period of positive revenue growth is a red flag — costs are rising faster than sales. Quarters where both lines converge near zero or go negative deserve close scrutiny.
How revenue converts to net income for the most recent annual period
Over the period Jan 2025 to Jan 2026, Nvidia Corp converts approximately 71¢ of every revenue dollar into gross profit (gross margin: 71.1%).After accounting for operating expenses and taxes and expenses, the company retains 55.6% as net profit margin, resulting in $120.07B in net earnings.
Period Information
Report Type: Annual (10-K)
Period: Jan 2025 to Jan 2026
Revenue composition by disclosure category for the latest period
Analyzing long-term margin stability and competitive positioning
NVIDIA CORP's margins show a clear inflection in early 2023 followed by a strong recovery and elevated levels through 2024–2026. Gross, operating and net margins fell to troughs around Q2 2023 (gross 56.3%, operating 46.7%, net 18.5%) and then climbed sharply through 2023–2024, peaking in mid‑2024 (gross 76.0%, operating 72.8%, net 55.0%). That recovery represents a material shift from the lower margins seen in early 2023.
Over the most recent five quarters, margins moderated from the early‑2025 highs but have shown a modest rebound into Q1 2026. Gross margin moved from 75.0% (2025‑01‑26) down into the ~70% range and rose to 71.1% in the latest quarter; operating margin followed a similar path to 68.9%; net margin dipped into the low‑50s and returned to 55.6% most recently. The latest gross margin was 71.1%, the latest operating margin was 68.9%, and the latest net profit margin was 55.6%.
Understanding Profit Margins
Between Jan 2025 and Jan 2026, Nvidia Corp converts every dollar of revenue through the following stages:
Sustainable competitive advantages reveal themselves through consistently superior profit margins over extended periods. Companies with durable economic moats maintain pricing power and operational efficiency that competitors struggle to match.
A sign of durable competitive advantage is earning sustained higher margins than competitors.Look for margins that remain stable or improve over time, especially during economic downturns. Declining margins may signal increasing competition, pricing pressure, or deteriorating business fundamentals.
Comparing reported earnings to actual cash generation
NVIDIA CORP’s trailing‑12‑month series shows a pronounced upward trajectory for both Net Income and Operating Cash Flow beginning in 2023 and accelerating through 2024–2026. Over the most recent year each TTM reading rose quarter‑to‑quarter: Net Income climbed from the low‑$30B range in early 2024 into the triple‑digit range by January 2026, and Operating Cash Flow moved from the high‑$20B/low‑$40B range in early 2024 to north of $100B by January 2026.
A clear inflection appears in 2023–2024 when both metrics began sizable, sustained increases. In recent quarters Net Income has exceeded Operating Cash Flow consistently, and that gap widened in the latest TTM. The most recent Net Income (TTM) was $120.07B. The most recent Operating Cash Flow (TTM) was $102.72B.
The Earnings vs. Cash Flow Gap
Reported earnings (Net Income) doesn't always reflect actual cash generation. Companies use accrual accounting, which recognizes revenue when earned and expenses when incurred—not when cash actually changes hands. This creates timing differences and opportunities for accounting discretion that can mask underlying business health.
Net Income (the "earnings" number) can be influenced by non-cash items like depreciation, stock-based compensation, and changes in accounting estimates.Operating Cash Flow, however, shows the actual cash the business generates from its core operations—a harder number to manipulate.
Trailing Twelve Months
What to Look For
Key Insight: Companies with durable competitive advantages typically show operating cash flow that meets or exceeds net income over time, demonstrating they convert accounting profits into actual cash that can be returned to shareholders or reinvested in the business.
Measuring management's efficiency at generating profits from shareholder capital
NVIDIA CORP's trailing twelve-month Return on Equity rose sharply beginning in mid-2023. After a period near 20% in early 2023, ROE jumped to 37.5% in the quarter ended 2023-07-30 and continued climbing through 2024, reaching a peak of 95.7% in the quarter ended 2024-10-27. Following that peak, ROE trended downward across 2025 into early 2026.
The decline from the late-2024 peak is gradual but persistent: 95.7% (2024-10-27) to 91.9% (2025-01-26), then to 83.4% (2025-10-26) and 76.3% in the most recent quarter. The most recent trailing twelve-month Return on Equity (ROE) for NVIDIA CORP was 76.3% for the quarter ended 2026-01-25.
The Gold Standard of Profitability
Return on Equity (ROE) is a powerful measure of how effectively a company's management is using the money shareholders have invested. Calculated by dividing Net Income by Shareholders' Equity, it reveals how much profit is generated for every dollar of equity capital.
A consistently high ROE (typically above 15-20%) is often the signature of a "quality" business with a durable competitive advantage. It indicates that the company can generate high returns on its own capital, which it can then reinvest at these high rates to compound value over time.
What to Look For:
How the company generates and deploys its cash
NVIDIA CORP's trailing twelve‑month operating cash flow has strengthened markedly in the most recent periods, accelerating from $83.16B (TTM to 2025‑10‑26) to $102.72B (TTM to 2026‑01‑25). This represents a sustained upward trend in operating cash generation over the past several reported TTM points, rising from $64.09B a year earlier (TTM to 2025‑01‑26) and showing a pronounced inflection in the latest quarter.
Investing cash flow has moved more negative recently, shifting from -$28.57B (TTM to 2025‑10‑26) to -$52.23B (TTM to 2026‑01‑25), indicating a sizable increase in net cash used in investing activities over that interval.
Finance cash flow has been negative throughout the period, growing in magnitude through 2025 to a peak of - $52.22B (TTM to 2025‑10‑26) before moderating to - $48.47B in the latest TTM (2026‑01‑25). The most recent trailing twelve‑month operating cash flow was $102.72B, investing cash flow was - $52.23B, and financing cash flow was - $48.47B.
Understanding Company Strategy
Capital allocation refers to how management decides to spend and invest the company's cash. Analyzing the three primary categories of cash flow reveals a company's true operational strategy:
What to look for: Is the company bootstrapping (funding growth solely from operating cash)? Are they borrowing to fund aggressive expansion or dividends? Or are they capital raising by issuing new shares, potentially diluting your ownership? A healthy, mature company typically generates strong operating cash, moderately invests in growth, and returns the surplus to shareholders through financing activities.
Trailing Twelve Months
Net assets attributable to each share — the accounting floor of intrinsic value
Why Book Value per Share Matters
Book value per share is the net worth of the company — total assets minus total liabilities — divided by shares outstanding (split-adjusted). It represents the theoretical liquidation value per share if every asset were sold and every liability repaid at balance-sheet carrying values. It is the accounting foundation upon which much of equity valuation is built.
A steadily rising book value per share is one of the most reliable signals of compounding wealth creation. It means the company is retaining earnings and building net worth faster than it is returning capital or eroding it. Warren Buffett famously tracked Berkshire Hathaway's book value per share for decades as his primary measure of intrinsic value growth.
Context is essential. Asset-heavy businesses (banks, manufacturers, utilities) should be judged by book value more directly than asset-light businesses (software, consumer brands), where intangible assets like intellectual property and customer loyalty may far exceed their balance-sheet carrying values. A company trading at a large premium to book value is not necessarily overvalued — it may simply possess competitive advantages that accounting rules do not capture. Conversely, a declining book value per share — especially over multiple years — is a serious warning sign of capital destruction.
How much of the company is financed by debt versus shareholders' equity
Reading the Debt-to-Equity Ratio
The debt-to-equity (D/E) ratio compares total financial debt to shareholders' equity. A ratio of 1.0 means the company has borrowed one dollar for every dollar of equity; a ratio of 2.0 means it has borrowed twice as much as it owns. Financial leverage amplifies both returns and risk: in good times, debt turbocharges equity returns; in bad times, it accelerates losses and can threaten solvency.
Trends matter more than a single number. A rising D/E ratio can mean the company is taking on debt to fund growth — potentially value-creating if returns exceed the cost of capital. But it can also mean equity is being eroded through losses or that the business is borrowing simply to sustain operations. A falling D/E ratio generally reflects strengthening financial health: earnings are being retained, debt maturities are being paid down, or both.
Industry norms vary enormously. Capital-intensive sectors (utilities, real estate, financials) routinely carry high D/E ratios that would be alarming in, say, a technology company. Always compare against sector peers. As a rough rule of thumb, a D/E above 2× in a cyclical business warrants careful scrutiny of interest coverage and refinancing risk.
Short-term liquidity — can the company cover its near-term obligations?
Liquidity: Can the Business Pay Its Bills?
The current ratio is calculated as current assets divided by current liabilities. A ratio of 1.5 means the company has $1.50 of short-term assets — cash, receivables, inventory — for every $1.00 of obligations due within the next twelve months. It is the most direct measure of near-term financial resilience: can the business meet its obligations without needing to raise new capital or sell long-term assets at a discount?
A ratio above 1.0 is generally healthy, meaning current assets exceed current liabilities. A ratio consistently above 2.0 may indicate the company is holding excess cash or inventory that could be deployed more productively. A ratio below 1.0 is a warning sign — the company is relying on future cash generation or external financing to cover its near-term obligations, which is manageable in normal conditions but dangerous during a downturn.
Trends and context matter.A declining current ratio isn't always alarming — highly efficient businesses (e.g., large retailers with reliable daily cash flows) often run leaner balance sheets intentionally. Conversely, a rapidly rising current ratio can signal slowing sales causing inventory to build, or customers taking longer to pay. Always compare the trend against industry peers and cross-reference with the cash flow statement to assess whether the business is genuinely liquid or just holding non-cash current assets.
How much the market is paying for each dollar of company earnings
NVIDIA CORP's trailing twelve-month P/E has shown notable volatility over the past two years. From mid-2024 through late 2024 the ratio sat in the low-50s (e.g., 50.5x on 2024-04-28, 51.6x on 2024-07-28, 54.6x on 2024-10-27) before declining to the high-30s/low-30s in early 2025 (39.8x on 2025-01-26, 34.7x on 2025-04-27). It then rebounded to 50.0x on 2025-07-27 and 47.3x on 2025-10-26, with the most recent quarter showing a decline back to 38.1x on 2026-01-25.
A clear inflection occurred in 2023 when the P/E spiked sharply — peaking at 147.9x on 2023-04-30, with other elevated readings of 110.9x (2023-07-30) and 107.5x (2023-01-29) — before settling into the 40–55x range through 2024 and early 2025. The most recent reported Price-to-Earnings ratio (period ending 2026-01-25) was 38.1x.
What Is the PE Ratio?
The Price-to-Earnings (PE) ratio is one of the most widely used valuation metrics in investing. It divides the current stock price by the company's earnings per share (EPS), revealing how much investors are willing to pay for each dollar of earnings. A high PE can signal that the market expects strong future growth, while a low PE may suggest undervaluation—or reflect genuine concerns about the company's prospects.
Context matters:PE ratios vary significantly across industries. High-growth technology companies routinely trade at PE ratios above 30x or 40x, while mature, low-growth sectors like utilities or financials often trade closer to 10–15x. Always compare a company's PE to its own history and its industry peers, not just an absolute number.
What to Look For:
Key Insight:The PE ratio is a snapshot of market sentiment and expectations. Tracking it over time alongside earnings trends reveals whether the market's valuation has expanded or contracted—and whether that change is justified by fundamentals.