NVIDIA Corporation (NVDA)vs
Alibaba Group Holding Limited (BABA)
Factual comparison for information only — not investment advice. Capital is at risk.
Quick verdict
NVIDIA and Alibaba sit at opposite ends of the technology and consumer-cyclical spectrum, and the numbers reflect that contrast. NVIDIA trades on a trailing P/E of 31.6 versus Alibaba's 17.31, yet NVIDIA's forward P/E of 10.38 and PEG of 0.29 suggest expected earnings growth could compress that premium quickly, while Alibaba's negative PEG of -0.98 reflects inconsistent recent earnings trends (epsCagr3y of -17.27%). NVIDIA scores an A for growth and quality against Alibaba's overall composite score of 4 versus NVIDIA's 2, though this composite scoring favours Alibaba on balance. NVIDIA shows superior margins (net margin 62.97% vs 10.12%) and returns on capital (ROIC 62.99% vs 3.17%), while Alibaba offers a lower valuation multiple on sales (P/S 1.84 vs 19.81) and a higher dividend yield (0.9% vs 0.14%). Both carry sector-specific risks tied to geography, competition, and macro sensitivity.
2-year relative performance
At-a-glance comparison
| Metric | NVDA | BABA |
|---|---|---|
| Price | $207.29 | $117.95 |
| Market cap | $5.02T | $282.7B |
| Forward P/E | 10.4× | 22.1× |
| EV / EBITDA | 26.0× | 13.7× |
| Price / sales | 19.8× | 1.8× |
| FCF yield | 4.3% | 3.3% |
| Rev. growth (3y) | 65.5% | 2.7% |
| EPS growth (3y) | 66.0% | -17.3% |
| Operating margin | 64.0% | 5.8% |
| ROIC | 63.0% | 3.2% |
| Net debt / EBITDA | -0.17× | -2.45× |
| Dividend yield | 0.1% | 0.9% |
| 1-year return | 75.1% | 114.9% |
| Beta | 2.21 | 0.50 |
Business model and revenue mix
NVIDIA designs advanced graphics, computational, and networking hardware, with its Graphics division built around GeForce GPUs for gaming and cloud gaming via GeForce NOW, alongside broader compute infrastructure serving global markets including the US, Taiwan, and China. Alibaba operates a different model entirely, providing technological infrastructure and marketing channels that enable merchants, brands, and retailers to reach customers within China and internationally. NVIDIA is classified under Technology/Semiconductors, a capital-intensive, innovation-driven space, while Alibaba sits in Consumer Cyclical/Specialty Retail, reflecting its e-commerce and platform-services orientation. NVIDIA's market capitalisation of approximately $5.02 trillion dwarfs Alibaba's $282.7 billion, indicating vastly different scales of investor expectation. NVIDIA's average daily volume of 156.99 million shares also far exceeds Alibaba's 12.54 million, pointing to differing liquidity profiles and market attention.
Valuation
On trailing earnings, NVIDIA appears more expensive at a P/E of 31.6 compared with Alibaba's 17.31. However, NVIDIA's forward P/E drops to 10.38, well below Alibaba's forward P/E of 22.12, implying analysts expect NVIDIA's earnings to grow substantially faster. This is reinforced by NVIDIA's PEG ratio of 0.29 versus Alibaba's -0.98, the negative figure stemming from Alibaba's recent earnings contraction. On sales and book value, Alibaba is markedly cheaper, with a P/S of 1.84 and P/B of 1.83, versus NVIDIA's P/S of 19.81 and P/B of 25.75. EV/EBITDA also favours Alibaba (13.67 vs 26.02). NVIDIA's free cash flow yield of 4.34% slightly exceeds Alibaba's 3.26%. The valuation verdict of B for the comparison reflects this mixed picture, with each company cheap on different metrics.
Growth profile
NVIDIA's growth profile is substantially stronger across the board. Its three-year revenue CAGR stands at 65.47% versus Alibaba's 2.74%, and its five-year revenue CAGR of 21.13% also outpaces Alibaba's 5.29%. Earnings growth tells a similar story: NVIDIA's three-year EPS CAGR of 65.99% and five-year figure of 32.08% contrast sharply with Alibaba's three-year EPS CAGR of -17.27%, though its five-year EPS CAGR of 3.31% shows some longer-term stabilisation. This disparity underpins the growth verdict of A for NVIDIA against Alibaba's more moderate trajectory. NVIDIA's growth has been driven by demand across its graphics and compute segments, while Alibaba's more modest expansion reflects a maturing e-commerce and cloud infrastructure base operating in a more constrained macro environment. The gap in these CAGR figures is central to why NVIDIA carries a high-growth style tag while Alibaba is tagged as mature.
Profitability and quality
NVIDIA's profitability metrics are exceptionally strong. Gross margin of 74.15%, operating margin of 64.02%, and net margin of 62.97% far exceed Alibaba's gross margin of 39.81%, operating margin of 5.83%, and net margin of 10.12%. Returns on capital show an even wider gap: NVIDIA's ROE of 111.66% and ROIC of 62.99% dwarf Alibaba's ROE of 10% and ROIC of 3.17%. These figures support the quality verdict of A assigned to NVIDIA. Alibaba's lower operating margin suggests a more competitive or lower-margin business environment relative to NVIDIA's semiconductor operations, though Alibaba's net margin benefits from other income sources beyond core operations. The scale of NVIDIA's profitability advantage across every measured metric is consistent and pronounced, marking one of the clearest points of differentiation between the two companies in this comparison.
Balance-sheet risk
Both companies maintain manageable balance sheets, though with different compositions. NVIDIA holds cash of approximately $10.1 billion against total debt of $69.33 billion, while Alibaba holds far larger cash reserves of $88.62 billion against total debt of $100.98 billion. Alibaba's net debt/EBITDA of -2.45 and NVIDIA's -0.17 both indicate net cash positions relative to earnings. NVIDIA's current ratio of 3.44 signals stronger short-term liquidity than Alibaba's 1.28. Interest coverage favours Alibaba slightly at 38.08 versus NVIDIA's 27.55, though both indicate comfortable debt-servicing capacity. The balance sheet verdict of B applies to this comparison overall, reflecting that neither company shows balance sheet stress, but each carries meaningfully different scale and liquidity characteristics that investors may weigh differently depending on their risk tolerance and sector exposure.
Price performance and shareholder returns
Share price performance has diverged notably by timeframe. Over one year, Alibaba's return of 114.86% has outpaced NVIDIA's 75.11%, while year-to-date NVIDIA is up 2.83% against Alibaba's decline of -21.83%. Over three years annualised, Alibaba's 41.62% return exceeds NVIDIA's 3.02%, but over five years annualised, NVIDIA's 32.41% far surpasses Alibaba's 6.48%. Maximum drawdown over five years was deeper for Alibaba at -39.92% versus NVIDIA's -29.43%, and NVIDIA's beta of 2.211 indicates notably higher volatility relative to the market than Alibaba's beta of 0.496. This pattern suggests NVIDIA has historically delivered stronger long-term compounding with higher volatility, while Alibaba's returns have been more cyclical and, at times, sharply negative, reflected in its recent year-to-date decline despite strong medium-term gains.
Which stock fits which investor
Given the overall scores of 2 for NVIDIA and 4 for Alibaba, alongside the bestFor designations, NVIDIA is positioned as suited to investors prioritising growth and quality, supported by its A verdicts in both categories and substantially higher revenue/EPS CAGRs and margins. Alibaba is positioned as suited to investors prioritising value and income, reflected in its lower P/S (1.84), P/B (1.83), and higher dividend yield (0.9%) compared with NVIDIA. Investors seeking exposure to high-margin, high-growth technology infrastructure with higher volatility (beta 2.211) may find NVIDIA's profile more aligned with their objectives, while those seeking lower-multiple exposure to Chinese consumer and cloud infrastructure markets, with a higher yield and lower beta (0.496), may find Alibaba's characteristics more relevant. Neither company's inclusion here constitutes a recommendation to buy or sell.
- Value: BABA
- Growth: NVDA
- Income: BABA
- Quality: NVDA
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Frequently asked questions
- Which company is cheaper on valuation?
- It depends on the metric used. Alibaba has a lower trailing P/E (17.31 vs 31.6), P/S (1.84 vs 19.81), and P/B (1.83 vs 25.75). However, NVIDIA has a lower forward P/E (10.38 vs 22.12) and a much lower PEG ratio (0.29 vs -0.98), reflecting stronger expected earnings growth.
- Which company has grown faster?
- NVIDIA has grown substantially faster on all measured timeframes, with a three-year revenue CAGR of 65.47% and five-year revenue CAGR of 21.13%, compared with Alibaba's 2.74% and 5.29% respectively. NVIDIA's EPS growth also outpaces Alibaba's over both periods.
- Which company is more profitable?
- NVIDIA shows markedly higher profitability across all margins, with a gross margin of 74.15%, operating margin of 64.02%, and net margin of 62.97%, versus Alibaba's 39.81%, 5.83%, and 10.12% respectively. NVIDIA's ROE of 111.66% and ROIC of 62.99% also far exceed Alibaba's 10% and 3.17%.
- How do their balance sheets compare?
- Both hold net cash positions, with net debt/EBITDA of -0.17 for NVIDIA and -2.45 for Alibaba. NVIDIA has a stronger current ratio (3.44 vs 1.28), while Alibaba has slightly higher interest coverage (38.08 vs 27.55) and much larger absolute cash reserves ($88.62 billion vs $10.1 billion).
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Methodology and data sources
Each comparison runs both companies through a transparent six-factor framework — valuation, growth, profitability/quality, balance-sheet strength, income and momentum. Factor winners are decided by fixed rules on the metrics shown above, not opinion. Figures are sourced from Financial Modeling Prep and refreshed on a schedule; the “last updated” date reflects the most recent data pull. TickerVerdict provides factual data comparisons for informational purposes only. Nothing here is investment advice or a recommendation to buy or sell any security. Figures may be delayed; verify with your broker before investing. Capital is at risk.