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NVDA Company Research
NVDA · Company Research · Fundamentals | Economics are strong; cash conversion has eased
2026-10-30 ET
NVIDIA's economics are very strong and most profit turns into cash, but the cash conversion ratio has slipped for two years. Latest-quarter revenue grew 105.9% year on year, with an operating margin of 66.2%.
Reading route: summary → evidence and countercase → data scope and next check.
Investment summary
Strong economics, softer cash conversion
The fundamentals read strong, but the share of profit turning into cash has fallen each year. Fiscal 2027 Q2 revenue was 96,221 million USD against 46,743 million a year earlier, up 105.9% year on year; operating margin was 66.2% against 60.8%. Free cash flow (operating cash flow less capital spending) as a share of net income fell from 90.8% in fiscal 2024 to 80.5% in fiscal 2026. The data do not show why; the decline is consistent with higher working-capital or investment needs, but the sources do not confirm it.
Weaker growth or margin would break this reading
The reading fails if the next filing shows either of two things: revenue growth below 65.5% year on year (the fiscal 2026 growth rate), or operating margin below 60.8% (the level of the same period a year earlier). Today's readings are 105.9% and 66.2%, so neither threshold has been reached.
Company overview
Two segments; consolidated figures cannot split their profit
NVIDIA is a fabless chip designer (it designs chips and contracts out manufacturing), reporting two segments in its 10-K. Compute & Networking covers data-center accelerated computing, networking platforms and automotive solutions; Graphics covers gaming and workstation GPUs. The markets differ, so consolidated revenue and profit do not establish each segment's profitability, and the sources do not provide segment profit.
Based on the 10-K for the period ended 2026-01-25; accession 0001045810-26-000021.
Financial analysis
Revenue more than doubled, then slowed; cash ratio eased
Revenue expanded over three fiscal years, but growth has cooled and cash conversion has eased. Revenue rose from 60,922 million USD in fiscal 2024 to 130,497 million in fiscal 2025 (up 114.2% year on year), then to 215,938 million in fiscal 2026 (up 65.5%). Operating margin was 54.1%, 62.4% and 60.4%; gross margin was 72.7%, 75.0% and 71.1%. Fiscal 2026 net income was 120,067 million and free cash flow 96,676 million.
Revenue rose from 60,922 million USD in fiscal 2024 to 215,938 million in fiscal 2026, with two year-on-year changes of 114.2% and 65.5%.
Source: SEC 10-K 0001045810-26-000021; Axiocairn calculations | Data date 2026-10-30
Operating margin went from 54.1% to 62.4% and then 60.4%, while gross margin went from 72.7% to 75.0% and then 71.1%.
Source: SEC 10-K 0001045810-26-000021; Axiocairn calculations | Data date 2026-10-30
Fiscal 2026 free cash flow of 96,676 million USD sits below net income of 120,067 million, and the ratio went from 90.8% to 83.5% and then 80.5%.
Source: SEC 10-K 0001045810-26-000021; Axiocairn calculations | Data date 2026-10-30
Valuation
The 41.76 P/E rests on a stale earnings figure
The P/E of 41.76 uses a lagging denominator, so it is only a rough reference. The close of 204.64 USD (2026-10-30) is divided by annual EPS of 4.9 USD, which ends 2026-01-25 and lags the latest filing by 2 fiscal quarters. Quarterly net income since then rose from 26,422 million USD to 59,688 million, up 125.9% year on year, so a multiple on current earnings could differ. The sources provide no estimates, so the size of the gap cannot be stated.
NVIDIA's 41.76 sits between MU at 11.90 and AVGO at 68.36, with AMD at 190.49 and no P/E available for INTC.
Source: SEC 10-K filings of the listed companies; licensed market data; Axiocairn calculations | Data date 2026-10-30
Sensitivity analysis
For this reading to stand, the next filing needs revenue growth of at least 65.5% year on year and an operating margin of at least 60.8%. These are the fiscal 2026 growth rate and the margin of the same period a year earlier. It should also be checked whether free cash flow as a share of net income stops falling; the latest fiscal-year figure is 80.5%.
The reading continues only if the next filing clears both thresholds. Revenue growth must stay at 65.5% or above year on year (the fiscal 2026 full-year rate); a lower reading means growth is weaker than that year. Operating margin, operating profit as a share of revenue, must stay at 60.8% or above (the same period a year earlier); a lower reading means the improvement since then has reversed. The filing must confirm each; the current data do not give causes.
Data unavailable: the sources do not provide a verifiable valuation model and its parameters, so no chart is drawn.
Key catalysts
The next check requires same-period financial records and original filings; its date is unverified. Guidance interpretation requires a transcript.
Recent news and events
Data unavailable: the source records include no timestamped news or social data, so price changes cannot be attributed to a particular announcement.
Data unavailable: the sources do not provide timestamped news records, so no chart is drawn.
Technical and advanced analysis
The closing price on 2026-10-30 ET was USD 204.64. This describes that close only. The source records provide no validated price model or complete technical conditions, so no subsequent direction is inferred.
Data unavailable: the sources do not provide a validated complete price series, so no chart is drawn.
Competitive landscape
Operating margin ranks second among peers; the set is thin
Among four filers in SIC code 3674, NVIDIA's fiscal 2026 revenue growth of 65.5% year on year trails MU at 256.3% and exceeds AMD at 34.3%, AVGO at 23.9% and INTC at -0.5%; its operating margin of 60.4% is second to MU at 74.6%. The limits are that the set has only four filers, with different business mixes and different fiscal year-ends, so the periods do not line up.
Peers are the largest filers in the same SEC industry code (SIC 3674); their businesses are not always comparable. Filings: AVGO 0001730168-25-000121, MU 0000723125-26-000023, AMD 0000002488-26-000018, INTC 0000050863-26-000011.
Operating margin is 60.4% for NVIDIA, against 74.6% for MU, 39.9% for AVGO, 10.7% for AMD and -4.2% for INTC.
Source: SEC 10-K filings of the listed companies; Axiocairn calculations | Data date 2026-10-30
Financial data
Data scope
Annual values come from the 10-K for the period ended 2026-01-25 (filed 2026-02-25, accession 0001045810-26-000021), and quarterly values from the 10-Q for the period ended 2026-07-26 (accession 0001045810-26-000075). Each was matched to the tagged figure in the filing. Share prices come from licensed market data, dated 2026-10-30 ET. Missing values are not filled with zero. Earnings-call transcripts, contemporaneous estimates, peer multiples and segment profit are outside this coverage.
The companion report, Thesis and Countercase, has its own page and generation request. Only the first requester of each ungenerated report for the fiscal quarter uses one credit; reading an existing report uses none.