Following a quarter when Nvidia Corp. grew data-center revenue and earnings each by more than 400%, another number illustrates the company’s dominance even more. Among the record-setting elements of Nvidia’s
NVDA,
-2.85%
stunning fiscal fourth quarter was its 76% GAAP gross margin, which was up from 66% a year before. Nvidia forecasts that margin will remain around the same level for its ongoing quarter.
Nvidia’s gross margins appear to be the second highest in the semiconductor industry, behind only those of Arm Holdings PLC
ARM,
+1.33%,
which licenses chip designs but doesn’t sell its own chips directly. Arm’s gross margins were roughly 93% in the December quarter. Unlike Arm, Nvidia incurs expenses for things like inventory and supply-chain distribution, which helps explain why the company’s gross margin is lower. At the same time though, Nvidia’s margins stand out among those elsewhere in the chip sector. Intel Corp.
INTC,
-2.36%
reported a gross profit margin of 46% while Advanced Micro Devices Inc.
AMD,
-0.84%
reported a 40% margin in the fourth quarter, according to FactSet. Admittedly, those companies have different business mixes. Intel and AMD make processor chips for PCs, among their other offerings, while Nvidia and AMD both have gaming-chip businesses. Plus, Intel manufactures its own semiconductors. Leaving mix aside, however, Nvidia’s margins are so high in part because of the high prices the company is able to command for its products, due to their complex nature and their unstoppable demand. And Nvidia’s chips really are complex — not just a …
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NVDA,
-2.85%
stunning fiscal fourth quarter was its 76% GAAP gross margin, which was up from 66% a year before. Nvidia forecasts that margin will remain around the same level for its ongoing quarter.
Nvidia’s gross margins appear to be the second highest in the semiconductor industry, behind only those of Arm Holdings PLC
ARM,
+1.33%,
which licenses chip designs but doesn’t sell its own chips directly. Arm’s gross margins were roughly 93% in the December quarter. Unlike Arm, Nvidia incurs expenses for things like inventory and supply-chain distribution, which helps explain why the company’s gross margin is lower. At the same time though, Nvidia’s margins stand out among those elsewhere in the chip sector. Intel Corp.
INTC,
-2.36%
reported a gross profit margin of 46% while Advanced Micro Devices Inc.
AMD,
-0.84%
reported a 40% margin in the fourth quarter, according to FactSet. Admittedly, those companies have different business mixes. Intel and AMD make processor chips for PCs, among their other offerings, while Nvidia and AMD both have gaming-chip businesses. Plus, Intel manufactures its own semiconductors. Leaving mix aside, however, Nvidia’s margins are so high in part because of the high prices the company is able to command for its products, due to their complex nature and their unstoppable demand. And Nvidia’s chips really are complex — not just a …nnDiscussion:nn” ai_name=”RocketNews AI: ” start_sentence=”Can I tell you more about this article?” text_input_placeholder=”Type ‘Yes'”]