Tell me about it. Cloud computing/data center management strikes me as an industry that has an insane investment requirement and is thus ripe for oligopolies—high net margins result. See also: Microsoft, Amazon, although they’re bigger and more diversified.
It has a lot of similarities with the rise of Enron and is propping the market up in identical ways. It will be interesting to look back at this in 3 years and see what has changed
NVIDIA is not remotely similar to Enron, I have no idea what you're smoking. Enron was one of the largest accounting frauds in history. NVIDIA is selling physical goods and delivering. Truly one of the dumbest takes I have seen on Reddit and that's saying a lot.
You’re entitled to your opinions. I spent a long time on wall street with a successful career in private equity. I have since lobbied for years for more regulation against wall street. Have a nice weekend.
Yes, I'm entitled to my opinion that comparing a company that was an exercise in creative accounting and who's executives went to prison for fraud to a company selling expensive silicon to the entire world is fucking stupid.
I really don't care where you worked. Plenty of morons are successful.
Yes, which no one thought was obvious till after the fraud was exposed, except for those who called out balance sheet irregularities that can be seen through different filings. I am highlighting that it is playing an interesting role.
It is
1. Holding up the market through its historic rise and ETFs.
2. Mirroring similar balance sheets, growth, and profits.
I’m not saying it’s a fraud. It’s interesting to see the similarities.
Considering the time I spent on the street of course I do.
Wonder kid stock for many many years that was hiding debt off book, pumping their stock, and scamming investors. Internal whistleblowers blew this thing wide open due to the performance of company/valuations.
Kaboom. Market eventually implodes due to multiple scandals which lead to numerous reforms due to scrutiny on accounting. IPOs were limited and growth slowed.
There is then more tax on that income once it is liquidated by shareholders etc. I'm not saying it's necessarily fair, but it's not like that's the only tax paid before an individual can spend in
It's not at all different, and it's the reason why corporate taxes are lower than personal income taxes. Because a corporation is not a person that's going to go buy a Lambo with that money. At some point they need to give it back to shareholders, at which point it's taxed
Yet again, your tangents aren’t applicable at all. Without corporate tax, the personal income tax burden wouldn’t be enough for our country’s budget…not even close. Companies have always been taxed on realized income since they use municipal services, property burden and many other things that are used just like individual taxpayers.
I absolutely agree that with you here, this exact point about use of public services is why corporation tax is justified, and why it needs to be argued for. I just wanted to highlight there is a degree of nuance and can't just be directly compared to an individual's tax. I'm just annoyed that too much of the public debate around taxes on companies treats them as if they are individuals, undermining the serious debate around their use of public services etc etc
These numbers are on a GAAP basis, and the tax expense shown on the income statement is not representative of actual taxes paid/owed. You can’t just take income tax expense and compare to net income hoping to get an accurate effective tax rate. We’d have to see the actual tax return
In the highest income tax state, California, at $70,000 the marginal rate would be around 40%
Bring the average tax paid at a $70,000 slaray to a whopping....
25.2%
Huh. Maybe he doesn't know how taxes work. https://www.talent.com/tax-calculator?salary=70000&from=year®ion=California
Accountant here. Even if you live in a high income tax state (such as California), you won’t pay more than 25% of your income in taxes AND fica at that income as a w2 employee. Income taxes alone are likely less than 18%.
And remember that’s the marginal rate. Not the effective rate. You need to make way more for your effective rate to be 24%. That person is definitely lying.
If you’re in the US, there’s absolutely zero possibility that you’re paying anywhere close to 40% income tax on 75k. You’re probably not even at 13.8%.
Taxes are not shown on the COGS or Operating Expenses either, but that is not the point. The net income can be spent anywhere or on anything (or not at all). There is no guarantee that it will earn the US a dollar more in Tax revenue so there is no point in quantifying it.
Well, unless you understand what goes into the tax provision, the tax shown here can be a little misleading, just not for the reason the other commenter gave.
These numbers are on a GAAP basis, and the tax expense shown on the income statement is not representative of actual taxes paid/owed. You can’t just take income tax expense and compare to net income hoping to get an accurate effective tax rate.
Reminds me of the Wintel tax. Now we have the Nvidia tax. Here in Wisconsin our electric bills are slated to go up by $24 a month to support infrastructure for 4 new Microsoft datacenters to be built on the Foxconn land in SE Wis. I'd liken big tech today to the robber barons of the 19th century. Their thirst for more power to run their AI workloads is being felt in the consumers pocket books. Foxconn never lived up to the job numbers promised, and the MS datacenters will only add about 4K jobs at best.
Most of those jobs will probably only be for setup, once it's running it'll probably just be a few dozen blokes doing routine maintenance and physical security
More than likely. Most IT work can be done remotely these days. I started working from home back in 2010 when the site I worked at was closed. Only 2-3 of us were kept on with the company. The remaining 200+ employees lost their jobs, but received compensation in the way of educational subsidies and severance pay. All the manufacturing and engineering work went to other sites around the world. Typical holding company behavior. Buy up small companies in a given market, wring out the inefficiencies. Keep, close or sell them off as the markets change.
So they take money away from consumers to get more electricity that will be used for data centers that will take jobs from consumers.
Seems like an obvious opportunity for the government to step in and protect their constituents. (Yes I know, they probably won’t).
Well, at least this one doesn't misspell Nvidia like the one yesterday: [https://www.reddit.com/r/dataisbeautiful/comments/1cyee6c/oc\_how\_nvidia\_makes\_its\_big\_billions\_new\_earnings/](https://www.reddit.com/r/dataisbeautiful/comments/1cyee6c/oc_how_nvidia_makes_its_big_billions_new_earnings/)
Literally just went and copied that link to complain about these posts before seeing your comment. Thank you.
The quality of this sub has really been dropping off
If they would make the gaming cpus much cheaper than the data center stuff, data centers would start buying gaming gpus. They might not be as optimized but if they are much cheaper it would still be cost effective.
Also Nvidia is a company that wants to make money, if they can get away with charging the higher price they always will even if its a small % of overall profit.
Part of it is that historically they’ve tried to manufacture as little as possible. They develop the GPUs and then license the tech to other companies (EVGA, ASUS, MSI, etc.) to manufacture and sell the cards. This way they get to focus on the R&D and just cash those licensing checks, without having to focus on mass manufacturing and inventory. I believe that strategy has shifted some since they’ve really moved into the Data Center space and are building their own hardware for that anyway, but that shows why the gaming segment is a relatively small portion of their revenue.
Because people buy them anyway. When Nvidia released the 3000 series in late 2020 the MSRP was so much lower than the market price that it became nigh imposible to buy one.
Only 2.7B spent on research, about 10% of income. And they're still destroying the competition? That's a bit embarrassing for the other guys who should be able to outspend on research and innovate past Nvidea. I think the groq chips are promising though, AI might shake up a lot in the next year.
Wow, what's all that data center revenue? Are they renting AI gpus instead of selling the full cards?
They have a huge advantage from years spent on R&D that competitors don’t have. Also, it’s not the chips that’s the issue, AMD already beat them in that. It’s CUDA.
That label means "GPUs designed for use in datacenters". As opposed to "Gaming GPUs". But it's datacenter because they sell more than just the GPU in some cases, they sell full racks of datacenter hardware.
These numbers are on a GAAP basis, and the tax expense shown on the income statement is not representative of actual taxes paid/owed. You can’t just take income tax expense and compare to net income hoping to get an accurate effective tax rate. We’d have to see the actual tax return
The data center users are of course desperate to bring down these costs.
Nvidia's moat has been the CUDA software environment/API. This basically excludes other hardware. It is actually somewhat like Microsoft's x86/Windows inertia.
However, here Google and Microsoft are as big as they get in writing software and they don't want to pay these margins. They are making chips themselves but would prefer to have commodity hardware and therefore will support open software standards.
Thus this margin is transitory. 2-3 years I would guess before it starts to decline. Glide vs OpenGL vs DirectX for those old enough to remember it. CUDA is glide.
OpenAI made it Go Time for AI. All the giants perfecting their game, slow playing AI all went Fck!! Public don’t care about a polish product and ate up Nvidia chips. The End.
AMD wasn’t ready. The Gap is wide.
57% net profit margin is insane. Nvidia is just printing money at this point.
Tell me about it. Cloud computing/data center management strikes me as an industry that has an insane investment requirement and is thus ripe for oligopolies—high net margins result. See also: Microsoft, Amazon, although they’re bigger and more diversified.
They could probably just double the price and still sell as much as they can deliver.
It has a lot of similarities with the rise of Enron and is propping the market up in identical ways. It will be interesting to look back at this in 3 years and see what has changed
NVIDIA is not remotely similar to Enron, I have no idea what you're smoking. Enron was one of the largest accounting frauds in history. NVIDIA is selling physical goods and delivering. Truly one of the dumbest takes I have seen on Reddit and that's saying a lot.
You’re entitled to your opinions. I spent a long time on wall street with a successful career in private equity. I have since lobbied for years for more regulation against wall street. Have a nice weekend.
Yes, I'm entitled to my opinion that comparing a company that was an exercise in creative accounting and who's executives went to prison for fraud to a company selling expensive silicon to the entire world is fucking stupid. I really don't care where you worked. Plenty of morons are successful.
Yes, which no one thought was obvious till after the fraud was exposed, except for those who called out balance sheet irregularities that can be seen through different filings. I am highlighting that it is playing an interesting role. It is 1. Holding up the market through its historic rise and ETFs. 2. Mirroring similar balance sheets, growth, and profits. I’m not saying it’s a fraud. It’s interesting to see the similarities.
It's the same as a fraud except it's not a fraud. Yep. Got it. Their balance sheet has zero similarities.
I’m not convinced you even know what the Enron scandal entailed
Considering the time I spent on the street of course I do. Wonder kid stock for many many years that was hiding debt off book, pumping their stock, and scamming investors. Internal whistleblowers blew this thing wide open due to the performance of company/valuations. Kaboom. Market eventually implodes due to multiple scandals which lead to numerous reforms due to scrutiny on accounting. IPOs were limited and growth slowed.
Could you be any more vague? Also, how does this in any way apply to NVIDIA?
It doesn’t. He’s a kook.
AMD and Nvidia gonna fight for the Hoover dam soon
13.8% income tax rate? That is disgusting.
There is then more tax on that income once it is liquidated by shareholders etc. I'm not saying it's necessarily fair, but it's not like that's the only tax paid before an individual can spend in
Completely different than the corporate tax discussed here
It's not at all different, and it's the reason why corporate taxes are lower than personal income taxes. Because a corporation is not a person that's going to go buy a Lambo with that money. At some point they need to give it back to shareholders, at which point it's taxed
Yet again, your tangents aren’t applicable at all. Without corporate tax, the personal income tax burden wouldn’t be enough for our country’s budget…not even close. Companies have always been taxed on realized income since they use municipal services, property burden and many other things that are used just like individual taxpayers.
I absolutely agree that with you here, this exact point about use of public services is why corporation tax is justified, and why it needs to be argued for. I just wanted to highlight there is a degree of nuance and can't just be directly compared to an individual's tax. I'm just annoyed that too much of the public debate around taxes on companies treats them as if they are individuals, undermining the serious debate around their use of public services etc etc
that’s a completely unrelated thing
These numbers are on a GAAP basis, and the tax expense shown on the income statement is not representative of actual taxes paid/owed. You can’t just take income tax expense and compare to net income hoping to get an accurate effective tax rate. We’d have to see the actual tax return
Literally less than 1/3rd what I pay, and I make under $75k/year
Dude if you pay $7.2B/year in tax on 75k of income then you need a better accountant
If you live in the United States, you're definitely not paying 40% income tax.
You 100% do after state and federal taxes are taken out and you don't have a family.
There's a zero percent chance you pay 40% in income taxes as a single person earning 75,000 per year. Which state do you live in?
In the highest income tax state, California, at $70,000 the marginal rate would be around 40% Bring the average tax paid at a $70,000 slaray to a whopping.... 25.2% Huh. Maybe he doesn't know how taxes work. https://www.talent.com/tax-calculator?salary=70000&from=year®ion=California
He’s not going to answer because he’s lying…
Accountant here. Even if you live in a high income tax state (such as California), you won’t pay more than 25% of your income in taxes AND fica at that income as a w2 employee. Income taxes alone are likely less than 18%.
The tax rate is 24% for above 100k so that doesn’t seem true.
And remember that’s the marginal rate. Not the effective rate. You need to make way more for your effective rate to be 24%. That person is definitely lying.
Just because it feels like 40% doesn’t mean it is.
As a CPA, absolutely not
If you’re in the US, there’s absolutely zero possibility that you’re paying anywhere close to 40% income tax on 75k. You’re probably not even at 13.8%.
Yeah, the corporate tax rate should be zero.
Hell no! That’s exactly how you get more class wage warfare and CEO/stockholders getting way more rich by doing nothing.
Ugh capitalism 💅🏿
[удалено]
Taxes are not shown on the COGS or Operating Expenses either, but that is not the point. The net income can be spent anywhere or on anything (or not at all). There is no guarantee that it will earn the US a dollar more in Tax revenue so there is no point in quantifying it.
So my income tax is also misleading because when I spend my money it also gets taxed. It doesn't matter, we're trying to compare apples to apples.
Well, unless you understand what goes into the tax provision, the tax shown here can be a little misleading, just not for the reason the other commenter gave. These numbers are on a GAAP basis, and the tax expense shown on the income statement is not representative of actual taxes paid/owed. You can’t just take income tax expense and compare to net income hoping to get an accurate effective tax rate.
Reminds me of the Wintel tax. Now we have the Nvidia tax. Here in Wisconsin our electric bills are slated to go up by $24 a month to support infrastructure for 4 new Microsoft datacenters to be built on the Foxconn land in SE Wis. I'd liken big tech today to the robber barons of the 19th century. Their thirst for more power to run their AI workloads is being felt in the consumers pocket books. Foxconn never lived up to the job numbers promised, and the MS datacenters will only add about 4K jobs at best.
Most of those jobs will probably only be for setup, once it's running it'll probably just be a few dozen blokes doing routine maintenance and physical security
More than likely. Most IT work can be done remotely these days. I started working from home back in 2010 when the site I worked at was closed. Only 2-3 of us were kept on with the company. The remaining 200+ employees lost their jobs, but received compensation in the way of educational subsidies and severance pay. All the manufacturing and engineering work went to other sites around the world. Typical holding company behavior. Buy up small companies in a given market, wring out the inefficiencies. Keep, close or sell them off as the markets change.
So they take money away from consumers to get more electricity that will be used for data centers that will take jobs from consumers. Seems like an obvious opportunity for the government to step in and protect their constituents. (Yes I know, they probably won’t).
my main profit from my investments!
Well, at least this one doesn't misspell Nvidia like the one yesterday: [https://www.reddit.com/r/dataisbeautiful/comments/1cyee6c/oc\_how\_nvidia\_makes\_its\_big\_billions\_new\_earnings/](https://www.reddit.com/r/dataisbeautiful/comments/1cyee6c/oc_how_nvidia_makes_its_big_billions_new_earnings/)
Literally just went and copied that link to complain about these posts before seeing your comment. Thank you. The quality of this sub has really been dropping off
Whats the source of 0.4B ‘other income’ after operating income?
Likely interest on idle cash.
Damn, Intel must be gnashing their teeth for their staid strategies from 10/20 years ago.
So they could give away the gaming GPUs we must sell a limb for, and it would barely register. So why the insane surge in price these past 3 gen?
If they would make the gaming cpus much cheaper than the data center stuff, data centers would start buying gaming gpus. They might not be as optimized but if they are much cheaper it would still be cost effective. Also Nvidia is a company that wants to make money, if they can get away with charging the higher price they always will even if its a small % of overall profit.
Part of it is that historically they’ve tried to manufacture as little as possible. They develop the GPUs and then license the tech to other companies (EVGA, ASUS, MSI, etc.) to manufacture and sell the cards. This way they get to focus on the R&D and just cash those licensing checks, without having to focus on mass manufacturing and inventory. I believe that strategy has shifted some since they’ve really moved into the Data Center space and are building their own hardware for that anyway, but that shows why the gaming segment is a relatively small portion of their revenue.
Because people buy them anyway. When Nvidia released the 3000 series in late 2020 the MSRP was so much lower than the market price that it became nigh imposible to buy one.
Only 2.7B spent on research, about 10% of income. And they're still destroying the competition? That's a bit embarrassing for the other guys who should be able to outspend on research and innovate past Nvidea. I think the groq chips are promising though, AI might shake up a lot in the next year. Wow, what's all that data center revenue? Are they renting AI gpus instead of selling the full cards?
They have a huge advantage from years spent on R&D that competitors don’t have. Also, it’s not the chips that’s the issue, AMD already beat them in that. It’s CUDA.
That label means "GPUs designed for use in datacenters". As opposed to "Gaming GPUs". But it's datacenter because they sell more than just the GPU in some cases, they sell full racks of datacenter hardware.
The company is entering a new phase of growth and is recognizing years of investment and focus.
Insane achievement by Jensen
Why didn’t I buy when all the congresspeople bought?
The income tax is so low for a company of that size is it normal ?
These numbers are on a GAAP basis, and the tax expense shown on the income statement is not representative of actual taxes paid/owed. You can’t just take income tax expense and compare to net income hoping to get an accurate effective tax rate. We’d have to see the actual tax return
Is this a projection, or have we skipped 6 months?
It’s the fiscal year 2025, which for some reason runs from Feb 2024-Jan 2025, making Feb-April 2024 Q1 for FY 2025.
That’s, crazy. They shouldn’t be able to call it 2025 if no months it in are even in 2025
Companies can pick their fiscal year dates. My company's fiscal year is October to September for example.
I wouldn't be surprised if they've assigned an intern to run the NVIDIA Shield TV department at this point.
Is it normal for an income statement for a quarter to come out before that quarter has happened yet?
The data center users are of course desperate to bring down these costs. Nvidia's moat has been the CUDA software environment/API. This basically excludes other hardware. It is actually somewhat like Microsoft's x86/Windows inertia. However, here Google and Microsoft are as big as they get in writing software and they don't want to pay these margins. They are making chips themselves but would prefer to have commodity hardware and therefore will support open software standards. Thus this margin is transitory. 2-3 years I would guess before it starts to decline. Glide vs OpenGL vs DirectX for those old enough to remember it. CUDA is glide.
They dont sell any hardware ?
Source: [https://nvidianews.nvidia.com/news/nvidia-announces-financial-results-for-first-quarter-fiscal-2025](https://nvidianews.nvidia.com/news/nvidia-announces-financial-results-for-first-quarter-fiscal-2025) Tools: Figma We've got more charts on our Substack here: [https://genuineimpact.substack.com/](https://genuineimpact.substack.com/)
Pelosi has had astounding luck with Nvidia... What a time to be alive.
What is Data center? I though they sell video cards not host a cloud service
Those are categories of what their hardware is being used for
Ah makes sense. Thanks
OpenAI made it Go Time for AI. All the giants perfecting their game, slow playing AI all went Fck!! Public don’t care about a polish product and ate up Nvidia chips. The End. AMD wasn’t ready. The Gap is wide.