A COMPARATIVE ANALYSIS OF NVIDIA FINANCIAL PERFORMANCE FROM BEFORE AND AFTER THE AI BOOM OF 2021

• Main Author: Bungaran Buaton, Janssen
• Format: Final Project
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/87503
• Institution: Institut Teknologi Bandung

The research paper would contain a comparative analysis of the financial ratios of Nvidia Corporation, the third largest company by market capitalization, and the leader in the hardware industry, more specifically high-quality GPUs. The research paper would look at how the introduction of GPT-3.0 and the subsequent Artificial Intelligence boom of investment in Generative AI and LLMs, and it would look at the period between the fiscal year 2017 to fiscal year 2024. It would look at the transformation of Nvidia whose main revenue stream comes from gaming GPUs and its pivot toward providing the infrastructure for AI training, which has propelled it to become among the three largest companies in the world along with Apple and Microsoft. This transformation has significantly affected the company's financial performance, market valuation and financial ratios. The research paper would compare Nvidia’s key financial ratios—profitability, solvency, liquidity, efficiency, market valuation, growth, and cash flow—over 2 periods, before (FY17-FY20) and after (FY21-FY24) the GPT-3.0 and the subsequent AI boom. Based on the data, revenue, net income, and Assets has increased during this period, and showcase a strong profitability, and growth, however it is also characterized with a number issues such as Covid-19, geopolitical tension between China and the United States which has resulted in tech blockade from the United States blocking Chinese company from buying high tech product from the United States. This research showcases a strong connection between innovation and financial strategy. This can be seen by the pivot to AI done by Nvidia. Nvidia create the CUDA system and continue to invest into artificial intelligence while the industry is still not showing promises, and now they are benefitting from their investment from the year prior as their GPUs are leaps ahead of their peers for task like AI training enabling them to sell them at high margin and achieve impressive financial growth.