AI demand has driven Nvidia’s market capitalisation to move past four trillion, making it the first company to ever accomplish this historic milestone.
How do other industries compare in terms of high average operating margins? Operating margin, also known as operating income margin, is a profitability ratio that measures how much profit a company makes from its core operations, relative to its revenue.
To explore this, the firm BestBrokers collected operating margin data on 1,189 companies with a market cap exceeding $10 billion. The analysis, passed onto Digital Journal, reveals significant differences in operating margins not only between industries but also among companies within the same sector.
This dual-level comparison highlights both cross-industry trends and intra-industry performance gaps.
Among the so-called ‘Magnificent 7’ (to deploy a movie pun), Nvidia stands out as the most operationally efficient, posting a remarkable operating margin of 59.86%. This is well ahead of Meta, which ranks second at 44.42%, and Microsoft, in third place with 43.79%.
These margins highlight Nvidia’s exceptional profitability per dollar of revenue, underscoring its dominant position in the AI and chipmaking sectors. In contrast, companies like Amazon and Tesla, which operate in lower-margin industries, trail significantly behind on this metric.
‘Magnificent 7’ companies ranked by operating margin
1. Nvidia – 59.86%
2. Meta Platforms (Facebook) – 44.42%
3. Microsoft – 43.79%
4. Alphabet (Google) – 37.11%
5. Apple – 31.57%
6. Amazon – 10.75%
7. Tesla – 8.76%
Hence Nvidia is currently the world’s most valuable company by market capitalisation at $4 trillion. Its operating margin of 59.86% reflects Nvidia’s dominance in high-margin markets like AI and semiconductors, driving strong profits.
Among the pure tech companies within the Magnificent 7, Meta ranks first, boasting an operating margin of 44.42%. This places Meta 5th across the broader tech industry analysed in the research, showcasing its profitability driven by advertising dominance and efficient cost management in the social media and metaverse sectors.
Microsoft holds a third place with an operating margin of 43.8%. While it narrowly trails Meta, Microsoft significantly outperforms other giants like Apple, Amazon, and Tesla, benefiting from its diversified software, cloud, and enterprise services.
Tesla ranks as the least efficient among the Magnificent 7, with an operating margin of just 8.76%. Notably, Tesla also falls outside the top 10 automakers by margin, placing 11th just behind Mercedes-Benz, which posts a slightly higher margin of 9.20%. This reflects the capital-intensive nature of the automotive industry and Tesla’s ongoing investments in scaling production and technology.
The technology sector has the second-lowest average operating margin across all industries at -5.76%, largely due to aggressive spending. Early-stage companies in AI, SaaS, and biotech often operate at a loss for years while scaling, pulling down the industry average. In stark contrast, PT DCI Indonesia tops the list with a 54.6% margin, benefiting from low operating costs, benefits from large-scale operations, and steady income from data centre contracts in a fast-growing Southeast Asian market.
