Nvidia is now worth $102M per employee

https://sherwood.news/markets/nvidia-is-now-worth-usd102m-per-employee/

by danielxli • 2 years ago

48 37 2 years ago

danielxli2• 2 years ago

Every employee at NVDA is basically worth more to the financial markets than any Series A startup lol

gizajob3• 2 years ago

Brilliant. Thanks for posting. Actually quite a good metric for thinking about valuation, ie it’s 5x what it should be right now.

grobbyy4• 2 years ago

I think about it the other way. Businesses with high $/revenue per employee, high margin, etc. tend to be fundamentally better managed and more robust.

I'm not claiming that applies to Nvidia either way specifically, but it's a good sign in the generic:

1. They're efficient.

2. They've avoided the curse of overhiring (hi, Google!)

3. They can stay afloat even if business drops a lot.

chx3• 2 years ago

But this article is about market cap not revenue. But even revenue is almost meaningless for the things you mention -- it's profit per employee which would be interesting. And for that, tech companies are nowhere near the top.

Check this https://airleasecorp.com/press/air-lease-corporation-announc... they made 753.6M in 2023 with 163 employees or 4.6M per employee. No one comes even close. No one.

I believe Fannie Mae is the second who made 17400 with 8100 people or 2.17M per employee.

To compare, nVidia made 4368 with 29600.

scottiebarnes• 2 years ago

Or here's another perspective:

Remember the point of "AI" is getting human-like productivity out of machines.

So should it be surprising that the company at the forefront of this is has a low human-to-everything ratio?

jfoutz2• 2 years ago

TSMC apparently doesn’t charge nearly enough for their services.

Rinzler892• 2 years ago

TSMC can charge as much as the market will bear. Nvidia already moved their production once to Samsung for the 3000 series GPUs just to call TSMCs bluff.

TSMC are the best in town, but they're also not the only game in town. Pretty sure Intel and Samsung are constantly tempting Nvidia with good offers, which Nvidia can use as leverage in negotiations to keep TSMC prices in check.

jfoutz2• 2 years ago

Fascinating, for whatever reasons, I thought they were years ahead, and Nvidia’s (and apple) only option.

Thanks!

gizajob3• 2 years ago

It does seem strange, because ok there’s competition, but there’s very limited competition – we’re talking maybe five or six chip manufacturers? And it seems they would all know the metrics of price and can ratchet upwards what they would charge Nvidia, like a cartel without officially forming a cartel.

If TSMC doubled or 10x what they charge Nvidia on Monday, Nvidia can’t switch suppliers overnight, and it would crash Nvidia’s valuation, leaving TSMC to say “ok we have the capacity for anyone who wants to take on Nvidia”.

Another side of that, while the whole “China invading Taiwan thing” isn’t exactly on the cards, there’s now $1+Trillion at stake shorting Nvidia stock alone if China felt like putting a few boots on the ground for a week.

adam_arthur2• 2 years ago

I've wondered this for awhile.

Theres a very recent comment from the CEO stating something similar... But historically it's seemed they've allowed their customers to take most of the margin.

They should have a lot of leverage being on the most advanced node, but doesn't seem they use it.

Likely a cultural thing, but if somebody has more insight would be curious

analognoise• 2 years ago

We consider repeatably providing good value to customers as some kind of weakness?

DomKM• 2 years ago

Perhaps the better question is why doesn’t ASML charge far more?

grobbyy4• 2 years ago

Believe it or not, elite universities are reaching similar heights. MIT is at roughly $20M endowment per faculty member.

All caveats apply. 20≠100, employees might include staff and grad students, etc.

Still, I would never advise anyone to donate to any institution like this.

rmorey• 2 years ago

Looks like Princeton tops the Ivy League (and perhaps all universities?) at $27M per faculty member. I often like to call it "a hedge fund with hobbies"

csa2• 2 years ago

Believe it or not, elite universities are reaching similar heights. MIT is at roughly $20M endowment per faculty member.

If you ran MIT, what do you think a good endowment amount per faculty member would be?

I’m not sure $20m is far off from optimal.

I might go down to $15m, with an annual draw down $750k so (5%) per year to cover burdened labor rate of average professor and certain percentage (half?) to go to “support” (i.e., everything else, including libraries, staff, maintenance, maybe grad student funding, etc.). Even that seems sort of on the tight side.

bryanlarsen• 2 years ago

$20M might be optimal if tuition was $0 and they didn't receive any research grants.

grobbyy4• 2 years ago

I'd go down to about $2M, which is where MIT was at a quarter century ago, when it was it's prime.

Being answerable to funding sources, tuition, etc. is a good thing. Having money to soon off from is not.

g15jv2dp• 2 years ago

An endowment is entirely different from a market capitalization.

How can you write "employees might include staff" and keep a straight face? Yes, they do, how is this even in question? MIT has 1089 faculty members but 17,180 employees total. That's a 15x difference.

grobbyy4• 2 years ago

Yes. Do you realize how insane this is? A colleague of mine used to have a chart of staff per faculty member at MIT versus time. That figure has gone up around 20-fold on that chart.

It's almost all bloat and overhead made possible by being over capitalized.

tananaev• 2 years ago

Nvidia is clearly overvalued, but betting against it is too risky. Nobody knows when its price will return to a reasonable value. It could be months or years.

chx3• 2 years ago

The market can remain irrational longer than you can remain solvent.

hiyer• 2 years ago

Any nvidia employees here? How much are you worth now? ;-)

st380752143• 2 years ago

Depends on how much the company pays me :)

orenlindsey• 2 years ago

They can't pay everyone $102M, that's the market cap (the total value of all stock shares added together). In terms of profit, it is only worth $2M.

ksec• 2 years ago

I wonder if Nvidia would consider acquiring either Qualcomm or Mediatek. Both have very little competing against Nvidia. Gets Nvidia into the Smartphone and Wireless game. Which is crucial if they intend to bet big in ARM PC. Broadcom is way too big, Marvell is also another target but may be a little overlap in terms of product range and doesn't offer any consumer profile products.

Nvidia is now worth $102M per employee

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