Now more than 30 years old, Nvidia reported revenue for the second quarter ended July 28 of 30 billion US dollars, up an extraordinary 122% from a year ago. The vast majority of that performance was down to the data centre business, which saw a 154% year-on-year rise to 26.3 billion dollars.
Perhaps, even more impressively, Nvidia's net cash from operating activities in the six months to July 28 tripled year-on-year to 29.8 billion dollars.
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| Net cash flow from operating activities in 2023 versus 2020 Source: The Magnificent Seven - Follow the Money |
In this decade, Nvidia has seen a massive increase in its cash flow, thanks to its leadership in the development of the GPUs (graphics processing units) underpinning the recent advances in AI. In particular, Nvidia has benefitted from a step change in spending on AI-related computing capacity by other members of the so-called Magnificent Seven, notably Amazon, Meta, Microsoft and Alphabet.
Like Apple, Nvidia makes an extraordinary return on capital employed (ROCE). Nvidia made a ROCE of more than 80% in 2023, compared with an aggregate ROCE of the Magnificent Seven of 29%. In the telecoms industry, ROCE tends to be below 10%.
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