NVIDIA Corporation NVDA

Key data

The business

NVIDIA designs the processors that train and run AI models, the networking gear that welds tens of thousands of them into a single machine, and CUDA, the software layer most AI code is written against. The buyers are a short list: Microsoft, Amazon, Google, Meta, Oracle, and a newer cohort of AI-native firms building their own compute. Payment is upfront hardware revenue on enormous orders, revenue is concentrated, and the product cycle now runs about a year.

The engine is scale multiplied by margin. Revenue went from $27.0B in FY2023 to $215.9B in FY2026, operating income from $4.2B to $130.4B, and free cash flow from $3.8B to $96.7B, an 81% conversion in FY2026. What changed last year is the shape of the profit: pre-tax income of $141.5B now sits $11.1B above operating income, because NVIDIA is marking up equity stakes in private AI companies rather than netting out interest and other items.

Business read. A hardware business whose reported profit now moves with a portfolio of its own customers.

Things you might not know

The street already discounts the marks. Consensus recorded April-quarter earnings of $1.87 against the $2.39 NVIDIA reported under GAAP, a $0.52 gap that closely tracks the investment gains. That matters because the 23.8x forward multiple is computed on an operating number, while the GAAP earnings line is the one that flatters.

Total investments jumped to $110.7B at the April quarter end from $74.2B three months earlier, $36.5B added in a single quarter, while that same portfolio contributed $16.4B to pre-tax income. Investment outflow, revenue, and investment gain can be the same dollar wearing three hats, all of it disclosed and none of it improper.

Guidance execution is three for three, and that is the entire verifiable window. NVIDIA beat street earnings at $1.30 against $1.26, $1.62 against $1.54, and $1.87 against $1.76. Treat it as three quarters of evidence rather than a long streak, because the source provides no more history than that.

Fundamentals

The April quarter is a working capital and portfolio story. Inventory rose 20.6% sequentially to $25.8B and receivables 5.7% to $40.7B, both consistent with ramping a new generation into enormous orders and both the first place a demand air pocket would appear. Investments rose 49.2% in three months, and non-operating income went from 1.2% of pre-tax profit a year ago to 23.4%.

Valuation

Peers: AMD, Broadcom, Marvell, Qualcomm, Intel.

The source report carries no peer comparison set, so the medians are left as not disclosed rather than assembled from mixed bases. On NVIDIA's own numbers, FY2028 consensus of $12.80 puts the stock at 16.8x, and stripping the April quarter's non-operating income and taxing the remainder at the quarter's 16.6% effective rate gives roughly $1.83 of operating earnings per share, near 29x annualized.

Management

Compensation

The linchpins

Win big if

Demand turns out to be found rather than funded. The first observable proof arrives on 2026-08-26, four days out: revenue clearing the $92.0B consensus with gross margin holding near 75% and an October guide that steps up again, while non-operating income falls back below 10% of pre-tax profit. The confirming signal is inventory growth slowing below revenue growth, which would say the ramp is being absorbed rather than stacked. At that point 83% revenue growth on a 74% gross margin is being re-rated rather than de-rated.

Surprised down if

The portfolio and the order book turn out to be one bet. The first observable proof is a July quarter where revenue lands below roughly $90B or the guide implies sequential deceleration, while non-operating income holds above 20% of pre-tax income and total investments grow another $30B. The confirming signal is inventory rising another 20% or more into decelerating sequential revenue, which in hardware shows up one to two quarters ahead of the revenue line. The terminal version is slower: a top-five customer publicly shifting a majority of a training cluster to internal silicon.

Last word

Non-operating income at 23.4% of pre-tax profit is a lot of weather for a company that sells chips.