Are NVIDIA’s Earnings Big Enough for You?
Even with eye-catching earnings, NVIDIA’s size and valuation may leave investors questioning whether the stock can keep up with the market’s lofty outlook.
NVIDIA, at more than $4 trillion in market capitalization, is the largest stock to ever exist. The company’s quarterly earnings announcements have become Super Bowl-like events. In its August 2025 release, NVIDIA reported past-12-month earnings that were over 60% higher than this time last year, compared to an approximately 14% rise for combined S&P 500 earnings over the same period. Despite this, the stock fell slightly the next day.
NVIDIA’s earnings were immense, but the price tag for those earnings is steep. As of August 31, 2025, NVIDIA’s market cap made it nearly 8% of the S&P 500 Index. Its last 12 months of earnings were $87 billion, or around 4% of the approximately $2 trillion in total S&P 500 Index earnings. For investors seeking higher returns, the company’s size and high valuation relative to peers suggest that markets continue to price in high future cash flows, lower expected returns, or a combination of both. As a result, even when NVIDIA announces eye-wateringly high earnings, its price may still drop.
Stock prices are an investor’s most valuable source of information and contain the market’s aggregated outlook for a stock’s future. Investors who own the broad market will get a slice of NVIDIA, including a claim on NVIDIA’s future earnings.
EXHIBIT 1
NVIDIA S&P Weight vs. S&P 500 Share of Earnings as of August 31, 2025
Disclosures
Source: FactSet. NVIDIA market cap as a percentage of the S&P 500 Index was calculated by Dimensional.
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