Does Nvidia have a lot of debt? (2024)

Does Nvidia have a lot of debt?

Total debt on the balance sheet as of January 2024 : $11.05 B. According to NVIDIA's latest financial reports the company's total debt is $11.05 B. A company's total debt is the sum of all current and non-current debts.

The WACC stands at 10.17%. This includes the cost of equity at 10.2%, calculated as Risk-Free Rate + Beta x ERP, and the cost of debt at 4.93%, reflecting the interest rate on NVDA's debt adjusted for tax benefits. The weight of debt in the capital structure is 0.45%.

NASDAQ: NVDA

In 2024, Nvidia's stock has continued to hit new heights, with its share price up 76% since the market closed out 2023. The tech giant remains on a promising growth trajectory, with its business likely to benefit from the tailwinds of AI and other tech sectors for years.

NASDAQ: NVDA

Shares of the AI chip leader got swept up in a broader AI sell-off after one analyst noted that Super Micro Computer (SMCI -23.14%), another AI stock leader, failed to report preliminary revenue, casting doubt on its upcoming results. That news caused Nvidia to fall 10%, while Supermicro lost 23.1% today.

NVIDIA has a total shareholder equity of $43.0B and total debt of $9.7B, which brings its debt-to-equity ratio to 22.6%. Its total assets and total liabilities are $65.7B and $22.8B respectively. NVIDIA's EBIT is $33.0B making its interest coverage ratio -54.1. It has cash and short-term investments of $26.0B.

How Much Debt Does NVIDIA Carry? You can click the graphic below for the historical numbers, but it shows that NVIDIA had US$9.71b of debt in January 2024, down from US$11.0b, one year before. However, it does have US$26.0b in cash offsetting this, leading to net cash of US$16.3b.

Cash on Hand as of January 2024 : $25.98 B

According to NVIDIA's latest financial reports the company has $25.98 B in cash and cash equivalents. A company's cash on hand also refered as cash/cash equivalents (CCE) and Short-term investments, is the amount of accessible money a business has.

So, Nvidia's revenue is on track to increase 5 times in a space of five years considering its fiscal 2024 forecast, translating into a compound annual growth rate (CAGR) of 38%. A similar CAGR over the next five years would take Nvidia's annual revenue to a whopping $295 billion in fiscal 2029.

Even with tremendous growth in revenue and profit, Nvidia holds another ace up its sleeve to continue dominating the AI and computing markets. High-end chip maker Nvidia (NVDA -10.01%) has smashed expectations year over year, with annualized revenue growth of 60% since 2021.

Multiple catalysts make Nvidia a solid long-term buy. As the following chart shows, Nvidia's growth has taken off from the end of 2022. NVDA Revenue (Quarterly) data by YCharts. The company's data center business has played a central role in this growth.

Is Nvidia over or undervalued?

This analysis corroborates my initial assertion: Nvidia doesn't seem overvalued. When we look at forward multiples, NVDA's current ratios are actually below those observed over the past several years. Moreover, I'd like to compare NVDA's ratio to that of other dominant AI players, such as Microsoft (MSFT) .

Compute and Networking, which includes artificial intelligence (AI), is Nvidia's biggest revenue generator.

Ahead of the conference, Truist analyst William Stein raised his price target on Nvidia stock to 1,177 from 911. He sees stronger demand in 2024 and 2025 for Nvidia's chips. Analysts at HSBC also increased their price target, going to 1,050 from 880. Both Truist and HSBC maintained a buy rating on the stock.

Total debt on the balance sheet as of December 2023 : $9.57 B. According to Tesla's latest financial reports the company's total debt is $9.57 B. A company's total debt is the sum of all current and non-current debts.

NVIDIA CORP has demonstrated strong quarter-to-quarter (Q2Q) revenue growth of 265.0%, reflecting its ability to generate consistent increases in sales. This growth highlights the company's effective market positioning and its potential for continued success.

The main competitors of NVIDIA include Broadcom (AVGO), Taiwan Semiconductor Manufacturing (TSM), Alphabet (GOOG), Alphabet (GOOGL), Apple (AAPL), Meta Platforms (META), Microsoft (MSFT), QUALCOMM (QCOM), Intel (INTC), and Texas Instruments (TXN). These companies are all part of the "computer and technology" sector.

On Thursday, Nvidia reported earnings and revenues that significantly surpassed market expectations, helping lift the company's overall value past $2 trillion, trailing only Microsoft and Apple among the largest U.S. firms.

Autonomous Machines

Powering real-time, autonomous tasks. Branches across the U.S. government are using NVIDIA AI-powered autonomous machines and robots to solve some of the world's toughest problems, saving both lives and costs with efficient, safe operations.

NVIDIA gross profit for the quarter ending January 31, 2024 was $16.791B, a 338.06% increase year-over-year. NVIDIA gross profit for the twelve months ending January 31, 2024 was $44.301B, a 188.49% increase year-over-year. NVIDIA annual gross profit for 2024 was $44.301B, a 188.49% increase from 2023.

“We believe Nvidia can surpass Apple by capitalizing on the artificial intelligence economy, which will add an estimated $15 trillion to GDP.” That was Beth Kindig, lead tech analyst at the I/O Fund, making a prescient call on the AI chipmaker in August 2021.

Is Nvidia bigger than Apple?

After starting 2023 being valued at around a $350 billion market cap, Nvidia is now worth about $2.2 trillion. That's a dramatic expansion in value and it puts it within striking distance of Microsoft and Apple, which are valued at around $3.1 trillion and $2.6 trillion, respectively.

It's already the world's third-largest company

As of this writing, Nvidia has a market cap of $2.2 trillion, making it the third-largest American company, behind only Microsoft and Apple.

Nvidia has a conensus rating of Strong Buy which is based on 39 buy ratings, 2 hold ratings and 0 sell ratings. The average price target for Nvidia is $1,004.92. This is based on 41 Wall Streets Analysts 12-month price targets, issued in the past 3 months.

Assuming Nvidia is still trading at the same forward P/E, its stock price could reach $3,360 by the end of 2030, or 328% above the current share price. That would put its market cap at over $8 trillion.

In 2021, Nvidia stock was priced at $583.36 on the day prior to the company announcing its intention to split its stock. That's nearly $180 less than its current stock price, which provides strong support for the theory the company could split its stock in 2024.