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Nvidia Fundamental Analysis November 2023

Nvidia Fundamental Analysis.

Resume of NVIDIA Fundamental Analysis. Nvidia is a global leader in visual computing technologies, and is renowned for pioneering the graphic processing unit (GPU). Over time, the company’s focus has shifted from PC graphics to encompassing a wide array of artificial intelligence (AI)-based solutions. These Ai solutions support high-performance computing (HPC), gaming, and virtual reality (VR) platforms.

The success of NVIDIA’s GPUs can be attributed to their parallel processing capabilities, driven by thousands of computing cores. These devices are essential for running complex deep learning algorithms. These GPU platforms are instrumental in shaping multi-billion-dollar markets such as robotics and self-driving vehicles.

NVIDIA’s GPUs are experiencing rapid adoption across a wide range of industries, from radiology to precision agriculture. They power the world’s most powerful supercomputers, including those at Oak Ridge National Laboratories in the United States.

NVIDIA holds a dominant position in the Data Center, professional visualization, and gaming markets. Its competitors like Intel and Advanced Micro Devices are striving to catch up. The company’s strategic partnerships with virtually all major cloud service providers (CSPs) and server vendors have been pivotal to its success.

Headquartered in Santa Clara, CA, NVIDIA reported revenues of $26.97 billion in fiscal 2023. It represented a slight increase from the $26.91 billion recorded in fiscal 2022.

Business Organization.

Starting in the first quarter of fiscal 2021, NVIDIA began categorizing its revenues into two segments: Graphics and Compute & Networking.

The Graphics segment encompasses:

  • GeForce GPUs for gaming and PCs.
  • GeForce NOW game streaming service, associated infrastructure, and gaming platform solutions.
  • Quadro GPUs for enterprise design.
  • GRID software for cloud-based visual and virtual computing, and automotive platforms for infotainment systems.

The Compute & Networking segment comprises Data Center platforms and systems designed for AI, HPC, and accelerated computing. It also includes DRIVE for autonomous vehicles and Jetson for robotics and other embedded platforms. Starting from the second quarter of fiscal 2021, this segment also incorporates Mellanox revenues.






According to Nvidia Fundamental Analysis, We think that there are several reasons to buy the stock.

Datacenter Business.

The datacenter segment presents a lucrative growth opportunity for NVIDIA. With businesses increasingly adopting cloud-based solutions, the demand for datacenters is on the rise. Major datacenter operators like Amazon, Microsoft, and Alphabet are expanding their global operations to meet this growing demand, driving the need for GPUs. NVIDIA stands to benefit from this trend. Indeed the company focuses on key growth drivers for its datacenter business, including inference, data science, and machine learning techniques, to solidify its position in this specialized market. NVIDIA’s GPUs, highly favored by datacenter operators, will certainly secure a larger market share. The acquisition of Mellanox has been instrumental in this effort.

Furthermore, the datacenter end-market is expected to benefit from increasing demand for generative AI and large language models. Indeed these technologies rely on GPUs, specifically NVIDIA’s Hopper and Ampere architectures. The strong demand for NVIDIA’s chips from major cloud service providers and consumer internet companies is anticipated to continue driving revenue growth in this segment. NVIDIA’s revenues from the Data Center end-market are set to grow at a remarkable CAGR of 63.1% from fiscal 2023 to 2025.


NVIDIA’s GPUs are experiencing rapid growth thanks to the widespread adoption of AI. By incorporating its GPUs into AI models, the company is expanding its presence in previously untapped markets such as automotive, healthcare, and manufacturing. This growth is expected to boost its earnings and revenues. NVIDIA is actively collaborating with leading cloud server providers like Amazon, Baidu, and Meta Platforms, who are integrating AI into various applications.

The company has also established partnerships with industry giants such as IBM, Microsoft, and SAP. The idea is to bring AI solutions to enterprise users. Recently, NVIDIA joined forces with top-tier OEMs like Dell, HP, and Lenovo to deliver high-performance workstations featuring Quadro RTX GPUs and its new CUDAX AI-accelerated software. This strategic move, positions NVIDIA to gain a competitive advantage over rivals while expanding its market share.

Autonomous Vehicle Market.

NVIDIA’s expansion into the autonomous vehicles and automotive electronics sector represents a promising opportunity. The company has made significant strides in the autonomous vehicle market and has established a strong presence. Collaborating with over 320 automakers, tier-one suppliers, automotive research institutions, HD mapping firms, and startups, NVIDIA is actively engaged in the development and deployment of AI systems for self-driving vehicles.

Notably, NVIDIA’s emphasis on integrating AI into infotainment systems is contributing to the growth of its autonomous driving segment. The company anticipates its total addressable market (TAM) in the automotive sector to reach $30 billion by 2025. This includes $25 billion for autonomous driving, $3 billion for deep neural network training and development, and $2 billion for validation and testing.

Strong Balance and Cash Flow.

NVIDIA is a financially strong company with substantial cash reserves and a robust balance sheet. As of July 30, 2023, the company held approximately $16.02 billion in cash, cash equivalents, and marketable securities, a substantial surplus compared to its total debt of $8.46 billion. With a net cash position, NVIDIA has the flexibility to pursue strategic acquisitions, invest in growth initiatives, and return capital to shareholders.

NVIDIA’s strong cash flow generation is a testament to its accelerated revenue growth and improving operational efficiency. In the first half of fiscal 2024, the company generated $9.26 billion in operating cash flow and $8.69 billion in free cash flow. This enhanced cash flow capacity empowers NVIDIA to make long-term investments in growth opportunities while also returning capital to its shareholders.

In fiscal 2023, the company returned $10.44 billion to shareholders through a combination of $398 million in dividend payments and $10.04 billion in share repurchases. During the first half of fiscal 2024, NVIDIA paid out $199 million in dividends and repurchased $3.07 billion worth of shares. As of the end of the second quarter of fiscal 2024, the company still had approximately $3.95 billion in remaining share repurchase authorization until December 2023. Additionally, NVIDIA’s board approved a new share repurchase authorization of $25 billion, which has no specified expiration date.

Nvidia Fundamental Analysis.

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