4. NVIDIA Corporation (NASDAQ:NVDA)
5-Year Net Income Growth: 80.81%
5-Year Revenue Growth: 56.73%
TTM Net Income: $53.01 Billion
Number of Hedge Fund Holders: 179
NVIDIA Corporation (NASDAQ:NVDA) is a leading technology company which a huge market capitalization of $3.307 trillion as of this writing. It engages in some of the most high growth industries within the greater technology sector namely, Data Centers, Automotive Solutions, Networking, and Gaming. They provide Gaming Processing Units (GPUs) and semiconductor chips for computing infrastructure, which have become the powerhouse for Data Centers and AI revolution.
The company tripled its market capitalization from 2019 to 2022, a time when most of its revenue came from GPUs business and Data Centers accounted for merely 30% of the revenue. However, things have changed, the second quarter of fiscal 2025 revealed Data Center segment now accounts for more than 87% of the revenue. And what’s more impressive is the fact that this segment is reaching record highs. During the most recent quarter Data Center revenue was up 154% year-over-year to reach $26.3 billion, mainly on the back of NVIDIA Corporation’s (NASDAQ:NVDA) Hopper GPUs.
The company also announced that its Blackwell platform GPUs production is scheduled to begin in Q4 and that management expects several billions in revenue from Blackwell in Q4. Recently in its October investor presentation the company announced that the Blackwell platform is already in full production phase, indicating that the revenue boost for the company might come sooner than expected. As per the management Blackwell utilizes 4 times less power when compared to Hopper GPUs, which is likely to cater the high power consumption issue associated with the Data Centers.
While the Data Center segment hit record high, the Gaming segment revenue also improved 16% year-over-year to $2.9 billion. Strong performance by these two segments resulted in the net income for NVIDIA Corporation (NASDAQ:NVDA) going up by more than 168% during the same time making it one of the high growth NASDAQ stocks that are profitable in 2024.
Vltava Fund stated the following regarding NVIDIA Corporation (NASDAQ:NVDA) in its Q3 2024 investor letter:
“Over the summer, we devoted a lot of time to studying the AI-related investment wave. This spans a wide range of sectors and our view could be very briefly summarised as follows: The first-tier beneficiaries are primarily companies in the semiconductor sector, NVIDIA Corporation (NASDAQ:NVDA) perhaps the most. That company is benefiting from the huge increase in investment by large technology companies to build enormous data centres. We know who NVIDIA’s customers are. They are companies like Meta, Alphabet, Amazon, and Microsoft. They are investing hundreds of billions of dollars into their AI capabilities. What is not entirely clear, however, is who are and will be the customers of NVIDIA’s customers, and, more importantly, when, and if, they will be able to come up with such huge demand for AI services that the profits from AI will justify and pay for the enormous investments all these companies have been making. The further we move away from the starting point that NVIDIA represents in our more broadly-reaching estimates, the lessreliable those estimates are.So far, we know just one thing for sure, and that is that investments in AI capabilities are ongoing and they are huge. They are not only bringing large demand to chipmakers and the semiconductor sector but to some other sectors as well. Indeed, building AI clusters also requires the construction of new semiconductor factories, new energy sources, and all the associated infrastructure. The numbers under consideration are incredibly high. It is possible that over the next decade the construction of AI centres will necessitate a 20% increase in US energy consumption. The investment required will be measured not in the hundreds of billions of dollars, but in an order of magnitude higher. Maybe two orders of magnitude.”
