Written By: Muhit Masood | Last Updated: May 13, 2025
| Ticker | NVDA UQ |
| Company Name | Nvidia Corp. |
| Shariah Compliance | Compliant |
| DP Ratio | 2.12% |
Shariah Issues in Computer Hardware Industries:
Companies involved in the Computer Hardware industries may have some very significant Shariah compliance issues.
Islamic investors are concerned that the companies would be used to facilitate or promote haram (forbidden) activities. This includes devices or systems designed for or supporting video games with elements of gore, violence, and nudity. Other concerns also include pornography, unethical content distribution, or anything that encourages behavior contrary to Islamic teachings. For example, computers or networking equipment used to host or access websites that promote immoral content or illegal activities would be problematic under Shariah law.
The Islamicly Shariah Board is of the view that such industries must be considered Shariah compliant because the product in itself (the absolute hardware or the graphics card) are generic in nature. These companies do not produce GPUs with the specific aim of it being used in games that are violent, having sexual content – which are considered non-Shariah. It is a generic product which is also widely used for various other shariah permissible uses such as machine learning, video editing, designing, rendering 3D structures, crypto mining, and so on.
Shariah Compliance Issues in NVIDIA Corp:
When examining NVIDIA’s revenue streams from a shariah compliance perspective, several compliance issues arise.
NVIDIA, mainly derives its revenues from the computing platforms, as well as their graphics cards, that include both permissible and potentially non-permissible activities under Islamic law. Here are the key areas to consider:
Primary Revenue Streams
1. Compute & Networking
This is NVIDIA’s largest segment, generating significant revenue from the provision of Data Center accelerated computing platforms and artificial intelligence (AI) solutions and software; networking; automotive platforms and autonomous and electric vehicles. This activity is generally permissible in Shariah as it involves the production and sale of generic software systems and hardware.
2. Graphics
This segment involves the sale of GeForce GPUs for gaming and PCs, the GeForce NOW game streaming service and related infrastructure, and solutions for gaming platforms. hardware and systems, which may raise ethical concerns from a shariah perspective. The involvement in the gaming industry can be deemed non-permissible due to the potential harm these products can cause such as supporting high definition video games with elements of bad language, gore, violence, nudity, gambling or such ethics which are averse to Shariah.
However, since the products themselves serve general technological or entertainment functions and are not specifically designed for impermissible use, the Shariah board deems the associated revenues to be compliant.
Let’s have a look at the operating segments from which the company derives its revenue and apply the shariah screens to them:
Revenue Segment Breakup: (In millions of USD)
For the year ended 26th June 2025
| Segments | Revenue | Non – Permissible Revenue | % of Non – Permissible Revenue | Non – Permissible Criteria Classification | Segment Description | Shariah Compliance Comments |
| Compute & Networking | 116,193 | – | – | – | Sale of Data Center platforms | No Shariah concerns found |
| Graphics | 14,304 | – | – | – | Sales of Graphic Cards | Nvidia’s graphics segment is considered to be Shariah Compliant, since the Shariah Board has deemed this revenue to be Compliant. |
| Interest income | 1,786 | 1,786 | 100% | Non-Islamic Finance | Interest Generated from cash balances | All forms of Interest Income generated by a Company are deemed to be considered Shariah non-permissible |
| Total | 132,283 | 1,786 | 1.35% | – | – | – |
Let us look into the Non-Operating revenue of the Company.
Non-operating revenue: (In millions of USD)
For the year ended 26th June 2025
| Segments | Revenue | Non – Permissible Revenue | % of non – permissible Revenue | Non – permissible segment classification | Segment Description | Shariah Compliance Comments |
| Other income | 1,034 | 1,034 | 100% | Non-Islamic Investments | Investments in funds and bonds | The Investments in question here are deemed non-permissible, hence the revenue generated from these have been deemed to be the same. |
| Total Non-Operating income | 1,034 | 1,034 | 100% | – | – | – |
It is clear from the table above that the non-operating income of the company is Shariah Not Compliant. This amount is included for the calculation of the Sector Compliance and Dividend Purification.
Sector Compliance Calculation:
| Total revenue | 132,283 |
| Non-permissible operating revenue | 1,786 |
| % of non-permissible revenue | 1.35% |
| Sector compliance | Compliant |
Dividend Purification Calculation:
| Revenue Description | Non-Permissible Revenue |
| Non-permissible operating revenue | 1,786 |
| Non-permissible non-operating revenue | 1,034 |
| Total non-permissible revenue | 2,820 |
| Total revenue of the company | 133,317 |
| Dividend Purification Ratio | 2.12% |
Financial Ratio Screen:
(All figures in Millions of USD for the Year ended 26th January 2025)
| Amount | Remarks | |
| Market Cap (as on 31st December 2024) | 1,509,780.54 | – |
| Total Debt | 8,463 | – |
| Debt Ratio | 0.56% | Passes the threshold of 33% |
The Company here passes the Financial Ratio screening, as the Debt Ratio is found to be within the 33% threshold.
Source: All the above information is based on the website of the company and the latest Annual Report for the period ended 31th December 2024.
Conclusion
Given the above information, we at Islamicly believe NVIDIA Corp. is Shariah-compliant, as its core products are generic and financials meet Shariah limits.
