Investing lessons from Nvidia’s blowout quarter. August 28, 2026

**SPEAKER_1** (0:02)
A LISTNER production.

**Scott Phillips** (0:04)
Shares, the S&P, the ISX, stocks.

**SPEAKER_1** (0:07)
This is Motley Fool Money.

**Scott Phillips** (0:10)
Welcome to Motley Fool Money, the podcast whose profits have more than doubled against this time last year. I'm Scott Phillips from the Motley Fool. He is the man whose profits double before breakfast. He is, of course, the man who put together strawman.com, Australia's premier online investment club, for whom money is just a plaything because no matter how long he spent, it could never count at all. He is, of course, Andrew Ram Page. Mr. Page, how are you?

**Andrew Page** (0:33)
Very good, sir. God, I wish that was true. That would be so nice if that was true.

**Scott Phillips** (0:39)
Speaking of nice, so I started. I'm just going to throw it out of the gate, man. I'll say hello first. How are you?

**Andrew Page** (0:44)
I'm very good. I'm very good, actually.

**Scott Phillips** (0:46)
How are you? Oh, really? Good, mate. I'm very, very well, too. Thank you.
This is Nvidia's numbers, mate. Nvidia is the chip maker that's powering the AI revolution, who I can never decide if they've been hit in the backside with a rainbow two or three times, or they're just really, really good. They're inventing the future. But I suspect it's the former, but that might be too jaundiced. Nvidia, for those who don't know, decided, managed to find a way to design it, a chip that was really good for game playing. Their graphics processing or GPU. And it was its thing, right? If you've got a computer and you want to get a separate chip so you can get really good graphics while you're playing online in your mom's basement, you've got an Nvidia chip in your computer. And they did really, really well.

**Andrew Page** (1:21)
I'm looking at my GeForce RTX right now through the side of my machine.

**Scott Phillips** (1:27)
Strongman coming to you from Ram's mom's basement.

**SPEAKER_4** (1:29)
Yeah, it's a beautiful bit of tech.

**Andrew Page** (1:31)
It's the biggest thing on the motherboard, right? Like, and it's the thing you spend up on.

**Scott Phillips** (1:35)
Oh, yeah, totally.

**Andrew Page** (1:37)
Yes, go on.

**Scott Phillips** (1:37)
It's part of the story. So then Nvidia says, OK, well, this is cool. We've got a great business. And then someone, I don't really know who Ram, it might have been Nvidia, it might have been someone who spent. We could mine cryptocurrency using these chips. And it went to the moon. It was like, oh my god, this thing's amazing. And then it turns out that a number of years later, it's like, we could use this to actually do the compute required for artificial intelligence. Let's do that. And three times, it is just, the first time I'm going to say, decent chance to invent to the future. If you come up with a brand new ship, it could do a thing, right? And that initial invention probably is worthy of saying, zero to one, you create a new way of doing a thing, you deserve the success of files. Not that they don't deserve it at all, by the way. I'm not entirely sure they went, hey, let's create a ship that could do AI, and that's how we'll make a lot of money. But for that said, can I just listen to some numbers here, everyone listening. Nvidia, for the second quarter of the current financial year, one quarter, three months, $96.2 billion in sales. That is more than $1 billion a day in computer chip sales. That was up 106% on last year. In other words, last year, they did $47 billion in sales and went, let's do another 47 on top of that, and the original number next year. It is just bananas.
The profit they made was $60 billion for a quarter.
These are just stupid, stupid numbers. They gross margins, 75%. Now, just to put that in context, that effectively means they get to sell a computer chip for four times what it cost them to make.
And they're just stupidly eye watering numbers. This is a $5 trillion US dollar. By the way, those numbers are all US dollars. So this is a $5 trillion US dollar business market cap wise. It is just an absolute monster.

**Andrew Page** (3:34)
Yep, it is. Lots of comparisons have been made over the last few years, really, about with these kinds of numbers and comparisons to the tech boom at the turn of the century. They completely missed the point. I'm not saying that these things aren't due for correction or aren't overpriced or anything like that, although I will come back to that. But the difference here is that they're making money.