NVIDIA vs Microsoft Which Is More Lucrative?

NVIDIA and Microsoft are two tech giants that have shown impressive growth in their respective stock prices in recent years. NVIDIA, known for its innovative graphics processing units (GPUs), has found success in various industries such as gaming, data centers, and artificial intelligence. On the other hand, Microsoft, a leader in software and cloud computing services, has consistently delivered strong financial results and market performance. Both companies have loyal investor followings, but which stock is the better investment choice? Let's delve deeper into NVIDIA vs Microsoft stocks to analyze their performance and potential for future growth.

NVIDIA or Microsoft?

When comparing NVIDIA and Microsoft, different investors may prioritize various metrics based on their investment strategies and goals. So, ask yourself what type of investor you are. This will guide you in determining which metrics are most important for your investment decision between NVIDIA and Microsoft.

Dividend Investors:

Dividend investors look for stable and growing income streams, using dividend metrics to assess potential investments. A company's dividend yield essentially measures the size of its dividend relative to the total market value of the company. NVIDIA has a dividend yield of 0.03%, while Microsoft has a dividend yield of 0.8%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. NVIDIA reports a 5-year dividend growth of -35.76% year and a payout ratio of 1.14%. On the other hand, Microsoft reports a 5-year dividend growth of 10.26% year and a payout ratio of 24.68%.

Value Investors:

Value investors focus on financial metrics to determine a stock's intrinsic value compared to its market value. The Price-to-Earnings (P/E) Ratio links stock price to a company's earnings per share, with NVIDIA P/E ratio at 37.87 and Microsoft's P/E ratio at 31.53. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. NVIDIA P/B ratio is 34.79 while Microsoft's P/B ratio is 9.66.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, NVIDIA has seen a 5-year revenue growth of 4.12%, while Microsoft's is 1.01%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with NVIDIA's ROE at 115.44% and Microsoft's ROE at 33.36%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $107.56 for NVIDIA and $385.54 for Microsoft. Over the past year, NVIDIA's prices ranged from $75.61 to $153.13, with a yearly change of 102.54%. Microsoft's prices fluctuated between $381.00 and $468.35, with a yearly change of 22.93%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.