By Daniel Sparks
Publication Date: 2026-04-17 01:05:00
Valuing an explosive tech enterprise is tricky — especially when the underlying industry is transforming. For a powerhouse like Nvidia (NVDA 0.22%), looking at past performance barely scratches the surface. Instead of relying on backward-looking valuation multiples, we need to examine how the stock is priced relative to the direction of the underlying operations.
And it doesn’t take much of a look to realize Nvidia’s business is benefiting from explosive growth — growth that could help justify the stock’s high valuation.
Image source: Getty Images.
A massive cash machine
Nvidia’s fiscal fourth-quarter results capture a revolutionary growth story. During the three months ending Jan. 25, the company’s total sales surged 73% year over year, bringing the quarter’s total revenue to $68.1 billion.
Massive spending from cloud providers drove those figures, with Nvidia’s data center division bringing in $62.3 billion.
Zooming out, Nvidia’s full-year revenue hit $215.9 billion, representing a massive 65 percent jump from the prior twelve months.
But beyond the staggering top-line momentum, the company’s cash generation is arguably even more impressive
Free cash flow for the quarter clocked in at an eye-popping $34.9 billion, or $96.6 billion for the full year. These figures were up from $22.1 billion and $60.7 billion in the respective year-ago periods.
Profitability metrics look equally exceptional.
Nvidia’s adjusted gross margin was impressively greater than 75 percent,…
