Nvidia has undoubtedly been one of the biggest winners of the artificial intelligence boom, delivering record earnings and a soaring stock performance so far this year.
However, the AI chipmaker isn’t the top-performing company in the S&P 500 when it comes to one measure of profitability. Its net profit margin, which reflects the revenue Nvidia keeps after expenses, is behind four other companies. Nvidia’s net income margin is 48.8%, according to Barrons, putting it in the fifth spot. Meanwhile, VICI Properties, a real estate investment trust that will release its second-quarter 2024 results at the end of the month, is the most profitable company in the S&P 500, with a net profit margin of 69.6%, according to Barrons. CME Group, an exchange marketplace, is the second-highest with 57.9%, VeriSign, an internet infrastructure company, is the third-highest with 54.8%, and credit card company Visa is in fourth-place with 52%.
The chipmaker recently experienced a stock slip that sent shares of chip firms around the world down with it. The company lost over $500 billion in market value over three trading days, and its market cap sank to $2.9 trillion, putting it back behind Microsoft and Apple which it had surpassed to become the most valuable public company in the world. Nvidia’s shares rebounded after the fall, and are up 160% so far this year. The company’s market cap is back at $3 trillion.
Throughout its strong stock rally, some investors have worried that AI is a bubble poised to burst. Meanwhile, Nvidia chief executive Jensen Huang has said the company is “on a one-year rhythm” with AI chips, and unveiled the successor to its Blackwell platform in June.
“We are poised for our next wave of growth,” Huang said during the company’s first-quarter earnings call in May, adding that the company’s Blackwell chips are “in full production and [form] the foundation for trillion-parameter-scale generative AI.”
