In today's rapidly changing and fiercely competitive business landscape, it is essential for investors and industry enthusiasts to thoroughly analyze companies. In this article, we will conduct a comprehensive industry comparison, evaluating NVIDIA NVDA against its key competitors in the Semiconductors & Semiconductor Equipment industry. By examining key financial metrics, market position, and growth prospects, we aim to provide valuable insights for investors and shed light on company's performance within the industry.
NVIDIA Background
Nvidia is a leading developer of graphics processing units. Traditionally, GPUs were used to enhance the experience on computing platforms, most notably in gaming applications on PCs. GPU use cases have since emerged as important semiconductors used in artificial intelligence. Nvidia not only offers AI GPUs, but also a software platform, Cuda, used for AI model development and training. Nvidia is also expanding its data center networking solutions, helping to tie GPUs together to handle complex workloads.
| Company | P/E | P/B | P/S | ROE | EBITDA (in billions) | Gross Profit (in billions) | Revenue Growth |
|---|---|---|---|---|---|---|---|
| NVIDIA Corp | 53.66 | 50.51 | 29.83 | 31.13% | $22.86 | $26.16 | 93.61% |
| Taiwan Semiconductor Manufacturing Co Ltd | 33.88 | 8.92 | 13.42 | 8.36% | $555.05 | $439.35 | 38.95% |
| Broadcom Inc | 173.88 | 15.54 | 20.78 | 6.49% | $7.29 | $9.0 | 51.2% |
| Advanced Micro Devices Inc | 102.69 | 3.30 | 7.81 | 1.36% | $1.55 | $3.42 | 17.57% |
| Qualcomm Inc | 17.56 | 6.64 | 4.55 | 11.46% | $3.21 | $5.78 | 18.69% |
| Texas Instruments Inc | 35.34 | 10.05 | 11.11 | 7.86% | $2.09 | $2.47 | -8.41% |
| ARM Holdings PLC | 232.26 | 24.56 | 42.23 | 1.83% | $0.11 | $0.81 | 4.71% |
| Micron Technology Inc | 28.46 | 2.37 | 3.84 | 4.07% | $4.3 | $3.35 | 84.28% |
| Analog Devices Inc | 64.75 | 3 | 11.23 | 1.36% | $1.12 | $1.42 | -10.06% |
| Microchip Technology Inc | 38.33 | 4.72 | 5.46 | 1.24% | $0.34 | $0.67 | -48.37% |
| Monolithic Power Systems Inc | 66.66 | 12.26 | 14.18 | 6.35% | $0.17 | $0.34 | 30.59% |
| ON Semiconductor Corp | 13.38 | 2.68 | 3.18 | 4.75% | $0.63 | $0.8 | -19.21% |
| ASE Technology Holding Co Ltd | 21.17 | 2.43 | 1.27 | 3.16% | $28.59 | $26.43 | 3.85% |
| STMicroelectronics NV | 10.10 | 1.26 | 1.62 | 1.98% | $0.74 | $1.23 | -26.63% |
| First Solar Inc | 16.30 | 2.67 | 5.28 | 4.22% | $0.45 | $0.45 | 10.81% |
| United Microelectronics Corp | 9.86 | 1.38 | 2.21 | 4.0% | $29.73 | $20.43 | 5.99% |
| Skyworks Solutions Inc | 24.44 | 2.28 | 3.49 | 0.95% | $0.18 | $0.43 | -15.9% |
| MACOM Technology Solutions Holdings Inc | 127.77 | 8.73 | 13.40 | 2.67% | $0.05 | $0.11 | 33.47% |
| Lattice Semiconductor Corp | 54.26 | 10.85 | 13.63 | 1.03% | $0.03 | $0.09 | -33.87% |
| Universal Display Corp | 29.73 | 4.43 | 10.96 | 4.29% | $0.08 | $0.13 | 14.57% |
| Average | 57.94 | 6.74 | 9.98 | 4.08% | $33.46 | $27.2 | 8.01% |
Through a thorough examination of NVIDIA, we can discern the following trends:
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At 53.66, the stock's Price to Earnings ratio is 0.93x less than the industry average, suggesting favorable growth potential.
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The elevated Price to Book ratio of 50.51 relative to the industry average by 7.49x suggests company might be overvalued based on its book value.
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The Price to Sales ratio of 29.83, which is 2.99x the industry average, suggests the stock could potentially be overvalued in relation to its sales performance compared to its peers.
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With a Return on Equity (ROE) of 31.13% that is 27.05% above the industry average, it appears that the company exhibits efficient use of equity to generate profits.
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With lower Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $22.86 Billion, which is 0.68x below the industry average, the company may face lower profitability or financial challenges.
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With lower gross profit of $26.16 Billion, which indicates 0.96x below the industry average, the company may experience lower revenue after accounting for production costs.
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With a revenue growth of 93.61%, which surpasses the industry average of 8.01%, the company is demonstrating robust sales expansion and gaining market share.
Debt To Equity Ratio
The debt-to-equity (D/E) ratio gauges the extent to which a company has financed its operations through debt relative to equity.
Considering the debt-to-equity ratio in industry comparisons allows for a concise evaluation of a company's financial health and risk profile, aiding in informed decision-making.
By considering the Debt-to-Equity ratio, NVIDIA can be compared to its top 4 peers, leading to the following observations:
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Compared to its top 4 peers, NVIDIA has a stronger financial position indicated by its lower debt-to-equity ratio of 0.16.
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This suggests that the company relies less on debt financing and has a more favorable balance between debt and equity, which can be seen as a positive attribute by investors.
Key Takeaways
The low P/E ratio suggests that NVIDIA may be undervalued compared to its peers in the Semiconductors & Semiconductor Equipment industry. However, the high P/B and P/S ratios indicate that the stock may be overvalued based on its book value and sales. On the other hand, the high ROE, low EBITDA, low gross profit, and high revenue growth suggest that NVIDIA is performing well in terms of profitability and growth compared to its industry peers.
This article was generated by Benzinga's automated content engine and reviewed by an editor.
© 2025 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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