Nvidia (NVDA) Net Profit Margin History: Quarterly Data (2020–2026)

Nvidia Net Profit Margin: 2020–2026

Nvidia (NVDA) achieved a 63.1% GAAP net profit margin in fiscal Q4 FY2027 (ending January 2026). For calendar year 2024, net margin averaged 55.7%. For a company generating over $100 billion in annual revenue, this places Nvidia in a category essentially by itself — margins at this level are historically achieved only by software monopolies and financial exchanges, not hardware companies.

Net Profit Margin by Year

Why Nvidia Has Software-Level Net Margins

Nvidia’s net margin profile is anomalous for a hardware company. The key reasons:

1. Fabless model: Nvidia designs chips but outsources manufacturing to TSMC. This eliminates the enormous capital costs of running semiconductor fabs, fundamentally changing the cost structure compared to Intel or Samsung.

2. IP-intensive product: An H100 GPU costs TSMC perhaps $3,000–$5,000 to manufacture. Nvidia sells it for $30,000–$40,000. The $25,000–$35,000 spread covers R&D amortization, SG&A, and profit. Once R&D is paid, incremental margin on additional units is enormous.

3. CUDA ecosystem: The software stack that makes Nvidia GPUs superior to alternatives is effectively pure intellectual property. Maintaining CUDA costs Nvidia perhaps $2–3 billion per year in R&D; the revenue it generates is $50–100+ billion. That ratio is better than most software companies.

4. Scale: At $187 billion in annual revenue, even Nvidia’s substantial absolute R&D spend (roughly $10 billion per year in 2025) is only ~5% of revenue, leaving the remainder as profit.

The 2022 Low: 10.4% Net Margin

Net margin hit its cycle low in Q3 2022 at 10.4% ($656M on $6.7B revenue). This remains a significant milestone: even in Nvidia’s worst recent quarter, the company was highly profitable. Most semiconductor companies would consider 10% net margins in a down cycle as acceptable performance. For Nvidia, which is now accustomed to 55–65% net margins, Q3 2022 felt like a crisis. In absolute terms, it wasn’t — Nvidia remained profitable throughout.

Comparison to Peers

Compare Nvidia’s net margins to other Semiconductors sector companies and platform companies:

• Palantir’s GAAP net margin: ~20–25% (much lower, reflecting heavy SBC)
• Microsoft’s net margin: ~35–37%
• Meta’s net margin: ~30–35%
• Nvidia: 55–63% in 2024–2026

Key Takeaways

• Net profit margin ranged from 10.4% (2022 Q3 trough) to 63.1% (2026 Q1 peak)
• Calendar 2024 net margin of 55.7% is exceptional at $113B annual revenue scale
• Nvidia’s fabless model, IP moat, and CUDA ecosystem enable software-comparable margins on hardware
• The 2022 trough (10.4%) proves Nvidia is cyclical but not unprofitable even in a downturn