NVIDIA Corporation operates as a data center scale AI infrastructure company. The company operates through two segments, Compute & Networking, and Graphics segments. The Compute & Networking segment provides data center accelerated computing and networking platforms and artificia
5yr coverageHQ: Santa Clara, CA, United States3 10-K6 10-Q
Gross Margin
71.07%
Op Margin
60.38%
Net Margin
55.6%
ROIC
66.5%
FCF
$96.7B
Revenue
$215.9B
5 years data3 10-K filings6 10-Q filingsZero AI numbers
This NVIDIA Corporation (NVDA) fundamental analysis covers the business model, economic moat, competitive positioning, SEC filing intelligence, and investment risks.
Built from 5 years of financial data, 3 annual 10-K filings, and 6 quarterly 10-Q filings sourced directly from SEC EDGAR.
Business ModelUnit EconomicsFinancialsCompetitiveHiddenRisks10-K / 10-QTranscriptsCap. Alloc.
01
Business Model & Economic Moat
AI accelerator monopoly monetized through full-stack hardware-software platform lock-in
NVIDIA's primary revenue engine is the Compute & Networking segment, dominated by H100, H200, and Blackwell GPU accelerators sold to hyperscalers, cloud providers, and enterprise data centers.
Segment
Revenue
Margin
Key Insight
Compute & Networking
~88% of FY2026 revenue (estimated)
High
Driven entirely by data center GPU accelerators and networking (InfiniBand/Spectrum). Gross margins structurally above corporate average due to high ASPs on Hopper and Blackwell platforms. This segment transformed NVIDIA from a $27B to $216B revenue company in 3 years.
Graphics
~12% of FY2026 revenue (estimated)
Medium
GeForce gaming GPUs and Quadro/RTX workstation products. Cyclically sensitive — impacted by crypto demand swings and consumer PC market conditions. Profitability is solid but growth trajectory is modest relative to Compute. Provides brand and developer ecosystem support for the broader CUDA platform.
Economic Moat
NVIDIA's moat is a layered combination of architectural leadership, software ecosystem depth, and network effects within the AI developer community.
ROIC expanded from 10.3% in FY2023 to 74.5% in FY2025, peaking at a level that is extraordinary for a capital-intensive hardware business.
FY2026 ROIC of 66.5% on $215.94B revenue demonstrates that the moat is generating real economic returns at scale, not just in a capacity-constrained moment.
02
Unit Economics & Margins
Near-100% CAGR revenue with 55%+ net margins compounds extraordinary per-share economics
Revenue CAGR FY2023-FY2026
~100%
From $26.97B to $215.94B in 3 years, almost entirely driven by Hopper and Blackwell data center GPU demand from hyperscalers.
Gross Margin Peak
74.99% (FY2025)
Expanded 1,806 bps from FY2023 56.93% peak driven by high-ASP Hopper products and supply-constrained pricing. Moderated to 71.07% in FY2026 on Blackwell ramp costs.
NVDA vs. peers — market share, moat durability, key threats
NVIDIA has achieved commanding profitability metrics in data center AI accelerators.
Gross margin expanded from 56.93% in 2023 to 74.99% in 2025, then contracted modestly to 71.07% in 2026, reflecting both pricing power and scale but also emerging cost pressures.
Operating margin reached 62.42% in 2025 before normalizing to 60.38% in 2026, demonstrating that even as revenues scaled 8x from 2023 to 2026 ($26.97B to $215.94B), the company maintained extraordinary operational leverage.
Gross margin expanded from 56.93% (2023) to 72.72% (2024) to 74.99% (2025), then contracted to 71.07% (2026)—a 390 basis point decline in a single year. This reversal occurred despite revenue growing 65.8% year-over-year, suggesting pricing power erosion or unfavorable product mix shift toward lower-margin segments as ...
Hyperscaler capex, particularly from Meta and Microsoft, has driven 80%+ of NVIDIA demand growth since 2023. These spenders operate multi-year procurement cycles with boom-bust patterns; any slowdown in AI model training ROI or capex budget reprioritization triggers rapid revenue deceleration and inventory destocking. FCF conversion declining from 0.91 to 0.81 suggests inventory builds are already pressuring working capital, a leading indicator of demand saturation. Historical GPU cycles show 20-40% revenue drops in trough years.
Google TPU, Amazon Trainium, Meta MTIA, and Microsoft Maia are shifting $10B+ annual capex away from GPUs toward proprietary silicon. These customers now have design capability and leverage to demand price concessions; NVIDIA's gross margin compression from 74.99% to 71.07% in 2026 is partly attributable to this pricing pressure. As in-house silicon matures (likely 2027-2028), NVIDIA loses a significant incremental customer base even if absolute GPU demand stays flat.
Educational research only — not investment advice. All financial data sourced from official market feeds. All filings read directly from SEC EDGAR. Zero AI-generated numbers. Always verify findings against primary sec.gov filings.