Microsoft Takes Top Spot in Net Income Among U.S. Listed Companies... Followed by Alphabet and Nvidia

Microsoft has emerged as the leader in net income over the past 12 months among U.S.-listed companies, recording $133.7 billion. Alphabet ($132.2 billion) and Nvidia ($120.1 billion) followed closely behind. The most distinct feature of this ranking is that six out of the top 10 companies are technology firms.

Microsoft at No. 1, Gap with Alphabet is $1.5 Billion

With revenue of $331.8 billion, Microsoft boasts a net profit margin of approximately 40%. This significantly outpaces the profitability of 4th place Apple (approx. 27%) and 5th place Amazon (approx. 11%). This is attributed to a business structure centered on cloud and software subscriptions, which has boosted the profit-to-revenue ratio.

The gap in net income with Alphabet is a mere $1.5 billion, which is effectively within the margin of error. Alphabet’s revenue scale ($402.8 billion) is $71 billion higher than Microsoft’s. Nevertheless, Microsoft leads in net income. Analysts suggest this may be due to the profit contribution from search and cloud sales being lower than expected or a heavier cost burden.

Nvidia’s Profit Scale Relative to Sales is Unprecedented

The structure of 3rd place Nvidia is the most eye-catching. Its revenue of $215.9 billion places it in the lower half of the top 10. However, with a net income of $120.1 billion, its net profit margin reaches approximately 56%. Nvidia is the only company in the top 10 to exceed a 50% margin. The dominant analysis is that Nvidia’s monopoly in AI semiconductors has created this ideal profit structure.

In terms of market capitalization, Nvidia ranks first within the top 10 at $5.25 trillion, about $1.5 trillion larger than Microsoft’s $3.57 trillion. This signals that the market is valuing Nvidia’s growth potential higher than its current earnings. In fact, Nvidia’s Price-to-Earnings Ratio (P/E), simply calculated based on an Earnings Per Share (EPS) of $6.53, is at a higher level than other Big Tech firms.

The contrast between Amazon and Walmart is also interesting. The two companies’ revenues are nearly identical at $716.9 billion and $713.2 billion, respectively. However, the gap in net income is wide: $77.7 billion versus $21.9 billion—a difference of more than threefold. This reflects the structural difference between Walmart, where low margins are inevitable due to distribution and logistics characteristics, and Amazon, whose cloud business drives profits.

Financial, Energy, and Healthcare: Traditional Giants Hold Their Ground

Among non-tech sectors, JPMorgan Chase ranked 7th with a net income of $57 billion, making it the only bank stock in the top 10. ExxonMobil had revenue similar to Microsoft at $323.9 billion, but its net income was limited to $28.8 billion, serving as a prime example of the thin profit margins in the energy industry.

Johnson & Johnson recorded the lowest revenue in the top 10 at $94.2 billion but posted a net income of $26.8 billion thanks to the stable profit generation typical of pharmaceuticals and medical devices. Its net profit margin of approximately 28% is similar to that of Apple.

Implications of the Net Income Ranking

This ranking is significant because it shows a discrepancy between market capitalization and net income rankings. While Nvidia, Apple, and Alphabet lead in market cap, Microsoft dominates in profit generation. Ultimately, this serves as a measure of how much of a premium the market assigns to future growth over current earnings.

Meta’s EPS stands at $26.53, the highest among the top 10. This reflects the effect of share buybacks reducing the number of outstanding shares. While its net income of $60.5 billion puts it in 6th place, on a per-share basis, it is considered to have the most efficient profit structure.

In the second half of the year, the expansion of AI-related investment costs is expected to be a key variable influencing changes in the top rankings. If data center investments by Alphabet and Microsoft pressure their profit margins, a shift in rankings is possible. Conversely, as long as Nvidia’s ultra-high profit structure remains, its status in the upper echelon of net income is unlikely to be easily shaken, despite smaller revenue.