A twofer. First up, (both May 29):
Nvidia is still the Bo Jackson of stocks
Palantir brags about its score on the “Rule of 40” — but NVDA just put up 69% revenue growth on huge margins. That’s a Bo-level double threat.
There’s only one professional athlete that’s been named an All-Star in two major North American sports.
His name is Bo Jackson, and in a remarkable injury-shortened career, he swung, ran, threw, and slid his way into the coveted All-Star rosters of the MLB and NFL. In the world of investing, Nvidia continues to pull off an almost equally impressive feat.
The Rule of 40
When I first failed to resist the pull of the stock market sports analogy last year, noting that Nvidia’s profitable growth was starting to feel very Bo-like, it seemed hard to imagine Nvidia would continue to advance at a similarly blistering pace. But, amid the DeepSeek panic, margin blips, export restrictions in one of its largest markets, and supply chain bottlenecks, Nvidia continues to deliver that rarest of combinations: growth and profitability.
In its Q1 results yesterday, NvidiaNVDA $139.19 (3.25%) posted a strong revenue beat, with sales coming in at $44.1 billion, up 69% year on year. Over the last four quarters, Nvidia’s net profit margin (pretax) has been 60%. That’s a Jackson-level dual threat that’s entirely unparalleled in large-cap stocks in the public market today, and it goes a long way toward explaining why, even at an eye-watering $3.3 trillion valuation, investors have been bidding up Nvidia’s stock on Thursday.
We can get some helpful context on just how good that is from the “Rule of 40” — a helpful heuristic typically applied to fast-growing startups by venture capital investors that posits that a company’s growth rate plus its margin should equal at least 40%. To be considered “healthy,” you need to be growing fast, solidly profitable, or some decent combination of the two.
Nvidia’s score over the last 12 months would be 69% + 60% = 129%. Compared to its tech peers in the S&P 500 index, most of which unsurprisingly don’t meet that very high bar, that is unrivaled. Meta’sMETA $644.51 (0.14%) is a solid 60%, but that’s still less than half of Jensen Huang’s company. Apple, one of the more mature members of the Magnificent 7, scored 37%, made up of 5% growth and a 32% margin.
PalantirPLTR $123.24 (-0.42%) is a particularly interesting company, with its executive team routinely embracing the Rule of 40 as a yardstick. Indeed, the company’s latest quarterly results start with this opening sentence:
“Our Rule of 40 score increased to 83% in the last quarter, once again breaking the metric.”
That particular calculation, however, uses Palantir’s “adjusted operating margin,” and it’s no surprise, of course, that margins tend to be bigger when you “adjust” some costs out of them. Per my calculations, which use the plain old bottom line pretax, Palantir’s score is more like 59% — still very healthy, but not quite as lights out as CEO Alex Karp would perhaps like....
....MUCH MORE
And:
The “most bullish thing” UBS heard Nvidia say
They also said their customers are transitioning from training to inference at a very rapid clip:
Nvidia Earnings Call Transcript—Q1 2026, May 28, 2025 (NVDA)
