How Nvidia Makes Money

Nvidia (NVDA), a multinational technology company, introduced and innovated the graphics processing unit (GPU). A GPU is a hardware component originally designed for a specific purpose: to render and display images, videos, and animations. Now, they are used in a wider range of applications, including creative production. machine learning, and artificial intelligence (AI). Nvidia has continued to deliver leading-edge graphics developments through its groundbreaking GPU efforts.

Currently, Nvidia’s greatest source of revenue is its Compute and Networking business segment, which includes artificial intelligence (AI). The company has become a full-stack (from front-end to back-end) computing infrastructure company that is reshaping a diverse range of complex computing processes.

In addition to the GPUs that Nvidia designs and manufactures for gaming, cryptocurrency mining, and other professional applications, the company also creates chip systems for use in vehicles, robotics, and other tools.

Nvidia’s Industry

Nvidia is a leading company in the semiconductor industry and is part of the greater information technology sector.

The company’s goal is to offer technology solutions for increasingly complex computational challenges. AI has been a major focus for years, and this focus has intensified in recent years as AI technology has made significant developments—and public interest in the potential uses and impact of AI has grown.

According to its 10-K filing, Nvidia believes that the market for its products faces intense technological change and changing industry standards.

It is also an extremely competitive market, where performance, product offerings, and access to customers, partners, and distribution channels are critical factors. Other key issues it must address are software support, the ability to conform to industry standard APIs, manufacturing strengths, processor pricing, and total costs.

Competitors

It has a variety of competitors in different areas of the industry. Some of them are hardware and software suppliers and licensors, such as Intel Corp. (INTC), Advanced Micro Devices (AMD), and Huwei.

Cloud services companies also engaged in designing AI computing functionality—including Alibaba Group (BABA), Alphabet Inc. (GOOG), Amazon Inc. (AMZN), and Microsoft (MSFT)—are also major competitors.

Nvidia’s Financials

As of March 2025, Nvidia’s market capitalization was $2.89 trillion.

In February 2024, Nvidia announced its financial results for the 2024 fiscal year (FY). In May 2024, the company announced its financial results for the first quarter (Q1) of the 2025 FY, the three-month period ended April 28, 2024.

file:///Users/katelynpeters/Downloads/NVIDIAAn.pdf

https://nvidianews.nvidia.com/news/nvidia-announces-financial-results-for-first-quarter-fiscal-2025

Revenue

For the entire 2024 fiscal year, revenue was $60.9 billion, up 126% from the previous fiscal year result. They had a record quarterly revenue of $26.0 billion, up 18% from Q4 and up 262% from a year ago.

Net Income

It had a net income of $14.8 billion, a growth of 21% over the previous quarter.

Operating Income

At $16.9 billion, Nvidia’s operating income, which is a profitability metric for its business segments.

Revenue From Primary Markets

The chip company serves five primary markets—data center, gaming, professional visualization, automotive, original equipment manufacturer (OEM) and other.

Its most noteworthy business results were derived from the first four markets:

• Data center revenue was a record $22.6 billion in the first quarter, up 23% from Q4 2024 and 427% YOY.
• Gaming revenue was $2.6 billion in the first quarter, down 8% from the previous quarter and up 18% YOY.
• Professional visualization revenue was $427 million in the first quarter, down 8% from Q4 and up 45% YOY.
• Automotive revenue was $329 million, an increase of 17% from Q4 and down 11% YOY.

Company Chief Executive Officer (CEO) Jensen Huang reported that “Accelerated computing and generative AI have hit the tipping point. Demand is surging worldwide across companies, industries and nations that demand for its AI solutions.”

Revenue From Business Segments

Nvidia reports business results for two business segments: Compute and Networking and Graphics.

Compute and Networking

According to Nvidia’s Form 10-K for the fiscal year 2024, the Compute and Networking segment is made up of:

• Data Center accelerated computing platforms and end-to-end networking platforms including Quantum for InfiniBand and Spectrum for Ethernet
• NVIDIA DRIVE automated-driving platform and automotive development agreements
• Jetson robotics and other embedded platforms
• NVIDIA AI Enterprise and other software
• DGX Cloud software and services

The Compute and Networking segment delivered revenue of $47.4 billion in FY 2024, up 215% from FY 2023. The segment accounted for almost 78% of Nvidia’s total revenue.

Operating income, at $32.01 billion, grew 530% YOY.

Graphics

Nvidia’s graphics segment is comprised of:

• The GeForce GPUs for gaming and PCs, the GeForce NOW game-streaming service and related infrastructure, and solutions for gaming platforms
• The Quadro/NVIDIA RTX GPUs for enterprise graphics design
• Virtual GPU (vGPU) for cloud-based visual and virtual computing
• automotive platforms for infotainment systems
• Omniverse Enterprise software for the construction and operation of metaverse and 3D internet apps

The Graphics segment delivered revenue of $13.51 billion in FY 2024, up 14% from FY 2023. The segment accounted for slightly over 22% of Nvidia’s total revenue.

Operating income, at $5.84 billion, grew 28% YOY.

Equity Holdings

Nvidia’s Form 13F includes the following equity holdings and associated values, as of December 31, 2023: