6 ms·

Nvidia is now worth $102M per employee

48 points by danielxli 2y ago

danielxli 2y ago
Every employee at NVDA is basically worth more to the financial markets than any Series A startup lol
gizajob 2y ago
Brilliant. Thanks for posting. Actually quite a good metric for thinking about valuation, ie it’s 5x what it should be right now.
- grobbyy 2y 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.
  - chx 2y 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-announces-fourth-quarter-fiscal-year-2023-results 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.
    - sfmz 2y ago
      why bother
      - chx 2y ago
        Probably the Sicilian mob too. So what? Criminal enterprises do not count.
    - shawabawa3 2y ago
      If you take their latest quarters results ($6B profit) you get $220k/employee per quarter or $880k/year
    - danielxli 2y ago
      Interesting. Yeah would be cool to look at profit
- scottiebarnes 2y 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?
jfoutz 2y ago
TSMC apparently doesn’t charge nearly enough for their services.
- Rinzler89 2y 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.
  - jfoutz 2y ago
    Fascinating, for whatever reasons, I thought they were years ahead, and Nvidia’s (and apple) only option. Thanks!
    - Alifatisk 2y ago
      Yeah I thought this as well, guess I got the wrong impression.
    - TMWNN 2y ago
      >Fascinating, for whatever reasons, I thought they were years ahead, and Nvidia’s (and apple) only option. It's easy to get that impression based on all the recent talk about TSMC and Taiwan's importance to the global economy. My understanding is that while TSMC is currently ahead, the lead over Intel and Samsung is very slight. Intel was historically the global leading-edge producer until relatively recently, and there is no reason to think that it (or Samsung, or even someone else) cannot regain the lead. Intel is, as I understand it, the first purchaser of ASML's newest lithographic machines, in hopes of leapfrogging TSMC.
  - gizajob 2y 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.
grobbyy 2y 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 2y 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"
- csa 2y 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 2y ago
    $20M might be optimal if tuition was $0 and they didn't receive any research grants.
    - csa 2y ago
      > if tuition was $0 https://sfs.mit.edu/undergraduate-students/the-cost-of-attendance/making-mit-affordable/ https://sfs.mit.edu/undergraduate-students/the-cost-of-atten... I couldn’t find the number quickly, but tuition is not a big funding source for the university. They are quite generous with tuition grants. This might not be true for the MBA program, but probably is for many/most other programs. > … and they didn't receive any research grants. Yeah. This is where I think one needs to look at exactly where expenses go. Grants don’t go as far as some folks think they do. Anyway, what’s your number with things being as they are? I’m still ok with $15-20m, and I am not particularly fond of university admins and the way they run things.
deleted 2y ago
[deleted]
tananaev 2y 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.
- chx 2y ago
  The market can remain irrational longer than you can remain solvent.
hiyer 2y ago
Any nvidia employees here? How much are you worth now? ;-)
- st380752143 2y ago
  Depends on how much the company pays me :)
orenlindsey 2y 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 2y 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.

48 points by danielxli 2y ago

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

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

grobbyy 2y 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.
- chx 2y 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-announces-fourth-quarter-fiscal-year-2023-results 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.
  - sfmz 2y ago
    why bother
    - chx 2y ago
      Probably the Sicilian mob too. So what? Criminal enterprises do not count.
  - shawabawa3 2y ago
    If you take their latest quarters results ($6B profit) you get $220k/employee per quarter or $880k/year
  - danielxli 2y ago
    Interesting. Yeah would be cool to look at profit
scottiebarnes 2y 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?

jfoutz 2y ago

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

Rinzler89 2y 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.
- jfoutz 2y ago
  Fascinating, for whatever reasons, I thought they were years ahead, and Nvidia’s (and apple) only option. Thanks!
  - Alifatisk 2y ago
    Yeah I thought this as well, guess I got the wrong impression.
  - TMWNN 2y ago
    >Fascinating, for whatever reasons, I thought they were years ahead, and Nvidia’s (and apple) only option. It's easy to get that impression based on all the recent talk about TSMC and Taiwan's importance to the global economy. My understanding is that while TSMC is currently ahead, the lead over Intel and Samsung is very slight. Intel was historically the global leading-edge producer until relatively recently, and there is no reason to think that it (or Samsung, or even someone else) cannot regain the lead. Intel is, as I understand it, the first purchaser of ASML's newest lithographic machines, in hopes of leapfrogging TSMC.
- gizajob 2y 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.

grobbyy 2y 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 2y 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"
csa 2y 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 2y ago
  $20M might be optimal if tuition was $0 and they didn't receive any research grants.
  - csa 2y ago
    > if tuition was $0 https://sfs.mit.edu/undergraduate-students/the-cost-of-attendance/making-mit-affordable/ https://sfs.mit.edu/undergraduate-students/the-cost-of-atten... I couldn’t find the number quickly, but tuition is not a big funding source for the university. They are quite generous with tuition grants. This might not be true for the MBA program, but probably is for many/most other programs. > … and they didn't receive any research grants. Yeah. This is where I think one needs to look at exactly where expenses go. Grants don’t go as far as some folks think they do. Anyway, what’s your number with things being as they are? I’m still ok with $15-20m, and I am not particularly fond of university admins and the way they run things.

deleted 2y ago

[deleted]

tananaev 2y 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.

chx 2y ago
The market can remain irrational longer than you can remain solvent.

hiyer 2y ago

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

st380752143 2y ago
Depends on how much the company pays me :)

orenlindsey 2y 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 2y 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.