Comparing NVIDIA (NASDAQ:NVDA) & SemiLEDs (NASDAQ:LEDS)

SemiLEDs (NASDAQ:LEDS) and NVIDIA (NASDAQ:NVDA) are both computer and technology companies, but which is the better stock? We will contrast the two companies based on the strength of their analyst recommendations, profitability, institutional ownership, risk, dividends, valuation and earnings.

Profitability

This table compares SemiLEDs and NVIDIA’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
SemiLEDs	-49.29%	-158.17%	-21.00%
NVIDIA	53.40%	110.60%	68.60%

Volatility & Risk

SemiLEDs has a beta of 1.04, suggesting that its share price is 4% more volatile than the S&P 500. Comparatively, NVIDIA has a beta of 1.69, suggesting that its share price is 69% more volatile than the S&P 500.

Earnings and Valuation

This table compares SemiLEDs and NVIDIA’s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
SemiLEDs	$5.98 million	1.43	-$2.69 million	($0.56)	-2.12
NVIDIA	$60.92 billion	50.91	$29.76 billion	$1.71	73.74

NVIDIA has higher revenue and earnings than SemiLEDs. SemiLEDs is trading at a lower price-to-earnings ratio than NVIDIA, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for SemiLEDs and NVIDIA, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
SemiLEDs	0	0	0	0	N/A
NVIDIA	0	4	39	1	2.93

NVIDIA has a consensus price target of $122.13, suggesting a potential downside of 3.14%. Given NVIDIA’s higher probable upside, analysts plainly believe NVIDIA is more favorable than SemiLEDs.

Institutional & Insider Ownership

76.3% of SemiLEDs shares are owned by institutional investors. Comparatively, 65.3% of NVIDIA shares are owned by institutional investors. 40.0% of SemiLEDs shares are owned by insiders. Comparatively, 4.2% of NVIDIA shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Summary

NVIDIA beats SemiLEDs on 12 of the 14 factors compared between the two stocks.

About SemiLEDs

SemiLEDs Corporation develops, manufactures, and sells light emitting diode (LED) chips, LED components, and LED modules and systems in the United States, Taiwan, the Netherlands, Germany, Japan, and internationally. The company also sells enhanced vertical, LED product series in blue, white, green, and UV; LED chips to packagers or distributors; and lighting products primarily to original design manufacturers of lighting products and the end-users of lighting devices, as well as packs and sells its LED chips. Its products are used for general lighting applications, including commercial, industrial, and residential lighting; and specialty industrial applications, such as ultraviolet or UV, curing of polymers, LED light therapy in medical/cosmetic applications, counterfeit detection, germicidal and viricidal devices LED lighting for horticulture applications, architectural lighting, and entertainment lighting. The company was incorporated in 2005 and is based in Chu-Nan, Taiwan.

About NVIDIA

NVIDIA Corporation provides graphics and compute and networking solutions in the United States, Taiwan, China, Hong Kong, and internationally. The Graphics segment offers GeForce GPUs for gaming and PCs, the GeForce NOW game streaming service and related infrastructure, and solutions for gaming platforms; Quadro/NVIDIA RTX GPUs for enterprise workstation graphics; virtual GPU or vGPU software for cloud-based visual and virtual computing; automotive platforms for infotainment systems; and Omniverse software for building and operating metaverse and 3D internet applications. The Compute & Networking segment comprises Data Center computing platforms and end-to-end networking platforms, including Quantum for InfiniBand and Spectrum for Ethernet; NVIDIA DRIVE automated-driving platform and automotive development agreements; Jetson robotics and other embedded platforms; NVIDIA AI Enterprise and other software; and DGX Cloud software and services. The company's products are used in gaming, professional visualization, data center, and automotive markets. It sells its products to original equipment manufacturers, original device manufacturers, system integrators and distributors, independent software vendors, cloud service providers, consumer internet companies, add-in board manufacturers, distributors, automotive manufacturers and tier-1 automotive suppliers, and other ecosystem participants. NVIDIA Corporation was incorporated in 1993 and is headquartered in Santa Clara, California.