$3.6 Million in Revenue Per Employee?!

Imagine you are the owner of XYZ Corp., a tiny company with 10 employees that just brought in $1 million in total revenue in 2024.

“Not a bad bit of business,” you say to yourself while reviewing the numbers.

However, your biggest competitor, ABC Inc., also brought in $1 million in total revenue for the year.

Another good year.

But when you start digging around, you find that ABC Inc. managed the same revenues with only five employees … half your manpower at XYZ…

ABC Inc. had a much better year because it operated more efficiently, had fewer employee expenses, and thus achieved a more substantial profit margin.

Now you’re left scratching your head, wondering how ABC had such an edge.

I bring this up because a similar phenomenon is happening in everyone’s favorite sector now.

Let me explain…

Chart of the Week: Overlooking the Important Stuff

When considering a company’s stock to buy … after looking at its Green Zone Power Ratings, the next logical step is to look at its financials.

However, it’s easy to get caught up in things like total revenue, acquisition rates and other top-line figures.

It’s easy to overlook how efficient that company is operating.

One way to do that is to see how much revenue it generates per employee.

Because labor costs are traditionally the highest expense of a company, examining its revenue per employee can show you several things:

How strong its profit margins are.
How resilient its business model really is.
How effectively the company can scale its operations.

That leads me to our Chart of the Week, which revealed some interesting data about some of the largest tech companies in the world:

Information from SEC filings shows that in 2024, Nvidia Corp. (NVDA) generated $3.6 million in total revenue per employee.

That’s 1.5X more than Apple Inc. (AAPL) and Meta Platforms (META) and almost double that of Google’s parent company, Alphabet Inc. (GOOGL).

The chart on the right is even more compelling.

This indicates Nvidia earned $2 million of net income per employee, more than double its nearest Big Tech counterpart — Meta — at $842,000 per employee. It’s more than 50X Amazon’s headline number.

Talk about efficient profits!

Inside the Numbers: Revenue Per Employee

Let’s put these figures into context a little bit.

First, Nvidia’s employee base is mainly focused on research and development.

Amazon, on the other hand, is the second-largest employer in the world behind Walmart — with most of its employees focused on logistics.

Tesla is basically an automotive manufacturer, which is a very capital-intensive sector.

The point here isn’t to suggest that Nvidia is a better company than its Big Tech peers but to understand that numbers tell a bigger story.

It shows that Nvidia is doing a lot more with a lot less.

That translated into huge profits in 2024, but market sentiment has drifted away from Big Tech so far this year.

After Monday’s market pull-back, all eight of these Big Tech companies had negative returns for 2025 — Meta was in positive territory before Monday.

But because of its quality and high revenue-to-employee ratio, Nvidia’s losses (around -16.5%) are right in the middle of the pack — not nearly as much as Tesla’s 41% year-to-date drop.

Either way, we’re clearly not in the same market environment now. And while companies like Nvidia, Meta and Apple turned efficiency into profits in 2024, it’s going to be almost impossible to replicate these numbers in 2025.

That’s all from me today.

Safe trading,