Financial Valuation and Assessment of NVIDIA

Research Article
Open access

Financial Valuation and Assessment of NVIDIA

Chengxi Ma 1*
  • 1 Bangor University    
  • *corresponding author Chm22rhv@bangor.ac.uk
Published on 10 November 2023 | https://doi.org/10.54254/2754-1169/43/20232117
AEMPS Vol.43
ISSN (Print): 2754-1177
ISSN (Online): 2754-1169
ISBN (Print): 978-1-83558-107-0
ISBN (Online): 978-1-83558-108-7

Abstract

As AI technology is at the heart of technology and driving the world's economy in different forms, NVIDIA was once again in the industry spotlight and where the world's attention was gathered at the end of May this year. This paper provides a financial analysis of this company's key figures and a comparison and commentary with its peers, using NVIDIA's fiscal year 2023 as the primary data base. It contributes recommendations for NVIDIA, the leading company, and provides ideas for the development of the related technology industry. Through the comparison of cross-sectional data, NVIDIA presents its internal data in an objective and clear manner, with significant changes in data that are reasonably and comprehensively articulated and well documented. In comparing the company's financials, NVIDIA performs well and has strong and core competitive capabilities. Using the formulas to estimate the stock price and enterprise value, NVIDIA is greatly overvalued. The reasons for this and the potential risks of the company are presented at the end of this paper.

Keywords:

financial valuation, accounting accuracy, risk assessment

Ma,C. (2023). Financial Valuation and Assessment of NVIDIA. Advances in Economics, Management and Political Sciences,43,17-24.
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References

[1]. N Kurian, JM Cherian, NA Sudharson, KG Varghese, S Wadhwa.: AI is everywhere. British Dental Journal 234 (2), 72-72, 2023.

[2]. Nvidia brings Generative AI to World’s enterprises with cloud services for creating large language and visual models. GlobeNewswire News Room. https://www.globenewswire.com/en/news-release/2023/03/21/2631609/0/en/NVIDIA-Brings-Generative-AI-to-World-s-Enterprises-With-Cloud-Services-for-Creating-Large-Language-and-Visual-Models.html, last accessed 2023/06/25.

[3]. Nvidia announces financial results for fourth quarter and fiscal 2022. NVIDIA Newsroom. https://nvidianews.nvidia.com/news/nvidia-announces-financial-results-for-fourth-quarter-and-fiscal-2022, last accessed 2023/06/25.

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[5]. Scott, R., Irem, T., Peter, W.: Accounting anomalies and fundamental analysis: A review of recent research advances. Journal of Accounting and Economics 50 (2-3), 410-454, 2010.

[6]. Lisa, A. H., Gabriel, P., Mark, Z.: The Decision-Usefulness of ASC 606 Revenue Disaggregation. SSRN 4108032, 2022.

[7]. Marinus, J. B., Paul, F., Patricia, A. F.: The Relevance of GAAP-Based Information: A Case Study Exploring Some Uses and Limitations. Accounting Horizons. Dec95, Vol. 9 Issue 4, p22-47. 26p. 1 Diagram, 5 Charts.

[8]. Denis, C., Samira, D., Michel, M.: Beyond earnings: do EBITDA reporting and governance matter for market participants?. Managerial Finance 43 (2), 193-211, 2017.

[9]. Govindarajan, V., Srivastava, A., & Zhao, R.: Mind the GAAP. Harvard Business Review (2021).

[10]. Balasundaram, N. Capital structure and its impact on profit ability: a study of listed manufacturing companies in SRI Lanka. Ekonomika, Journal for Economic Theory and Practice and Social Issues 56 (4), 83-92, 2010.

[11]. Wu, W.-T. (Alexandra). (2013). The P/E Ratio And Profitability. Journal of Business & Economics Research (JBER), 12(1), 67–76.

[12]. Investor presentation Q4 FY23. https://s201.q4cdn.com/141608511/files/doc_presentations/2023/02/nvda-f4q23-investor-presentation-final.pdf, last accessed 2023/06/25.

[13]. Nvidia revenue falls 17% but data center growth remains strong. CNBC. https://www.cnbc.com/2022/11/16/nvidia-nvda-earnings-q3-2023-.html, last accessed 2023/06/25.

Cite this article

Ma,C. (2023). Financial Valuation and Assessment of NVIDIA. Advances in Economics, Management and Political Sciences,43,17-24.

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About volume

Volume title: Proceedings of the 7th International Conference on Economic Management and Green Development

ISBN：978-1-83558-107-0(Print) / 978-1-83558-108-7(Online)
Editor：Canh Thien Dang
Conference website: https://www.icemgd.org/
Conference date: 6 August 2023
Series: Advances in Economics, Management and Political Sciences
Volume number: Vol.43
ISSN：2754-1169(Print) / 2754-1177(Online)

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References

[1]. N Kurian, JM Cherian, NA Sudharson, KG Varghese, S Wadhwa.: AI is everywhere. British Dental Journal 234 (2), 72-72, 2023.

[2]. Nvidia brings Generative AI to World’s enterprises with cloud services for creating large language and visual models. GlobeNewswire News Room. https://www.globenewswire.com/en/news-release/2023/03/21/2631609/0/en/NVIDIA-Brings-Generative-AI-to-World-s-Enterprises-With-Cloud-Services-for-Creating-Large-Language-and-Visual-Models.html, last accessed 2023/06/25.

[3]. Nvidia announces financial results for fourth quarter and fiscal 2022. NVIDIA Newsroom. https://nvidianews.nvidia.com/news/nvidia-announces-financial-results-for-fourth-quarter-and-fiscal-2022, last accessed 2023/06/25.

[4]. AI chip boom sends Nvidia’s stock surging after Whopper of a quarter. CNN business. https://www.cnn.com/2023/05/25/tech/nvidia-earnings-ai/index.html, last accessed 2023/06/25.

[5]. Scott, R., Irem, T., Peter, W.: Accounting anomalies and fundamental analysis: A review of recent research advances. Journal of Accounting and Economics 50 (2-3), 410-454, 2010.

[6]. Lisa, A. H., Gabriel, P., Mark, Z.: The Decision-Usefulness of ASC 606 Revenue Disaggregation. SSRN 4108032, 2022.

[7]. Marinus, J. B., Paul, F., Patricia, A. F.: The Relevance of GAAP-Based Information: A Case Study Exploring Some Uses and Limitations. Accounting Horizons. Dec95, Vol. 9 Issue 4, p22-47. 26p. 1 Diagram, 5 Charts.

[8]. Denis, C., Samira, D., Michel, M.: Beyond earnings: do EBITDA reporting and governance matter for market participants?. Managerial Finance 43 (2), 193-211, 2017.

[9]. Govindarajan, V., Srivastava, A., & Zhao, R.: Mind the GAAP. Harvard Business Review (2021).

[10]. Balasundaram, N. Capital structure and its impact on profit ability: a study of listed manufacturing companies in SRI Lanka. Ekonomika, Journal for Economic Theory and Practice and Social Issues 56 (4), 83-92, 2010.

[11]. Wu, W.-T. (Alexandra). (2013). The P/E Ratio And Profitability. Journal of Business & Economics Research (JBER), 12(1), 67–76.

[12]. Investor presentation Q4 FY23. https://s201.q4cdn.com/141608511/files/doc_presentations/2023/02/nvda-f4q23-investor-presentation-final.pdf, last accessed 2023/06/25.

[13]. Nvidia revenue falls 17% but data center growth remains strong. CNBC. https://www.cnbc.com/2022/11/16/nvidia-nvda-earnings-q3-2023-.html, last accessed 2023/06/25.

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