After topping the $4 trillion market cap milestone, Nvidia’s valuation per employee is reaching new heights
Nvidia: an economic machine that combines scientific ingenuity, capital, and a small town’s worth of people into an asset worth $4 trillion.
According to my ChatGPT query, which poetically was probably only made possible by an Nvidia GPU, there are a few American towns with a population of about 36,000: Westerville, Ohio, and Haverhill, Massachusetts, were two of the options given to me.
If you’re unfamiliar with those places, that’s no surprise. They aren’t very big in the grand scheme of America. And yet, those towns each represent approximately the entire workforce of the world’s most valuable company, which this week passed the $4 trillion market cap milestone, becoming the first public company ever to do so.
As I’ve written before, Nvidia’s execution has been nothing short of remarkable. Very, very few companies get to put up the kind of revenue growth numbers that Jensen Huang’s company has printed. Even fewer make huge margins while growing that fast. None have done it on this scale, or with just 36,000 employees as of the latest count.
Indeed, compared to the rest of its Big Tech peers, Nvidia’s revenue and net profit per employee are in a league of their own. Now, with its valuation at $4 trillion, the market is ascribing more than $111 million of equity value per employee to Nvidia. That’s even more than the frothy value ascribed to Palantir’s tiny workforce of 4,000 people.
Obviously, the ratio of market cap to employees should never be the first port of call for equity analysts trying to value a company. Price-to-earnings multiples, discounted cash flow analysis, EV-to-EBITDA multiples — or even just a vibe check — are arguably better places to start if you’re looking for predictive power. But for a 30,000-foot zoomed out view, it’s a good place to measure a fundamental goal of capitalism: turn employed people into valuable equity.
