Is NVIDIA Stock Halal? Full Islamic Finance Analysis

The Quick Answer

NVIDIA (NVDA) is generally considered halal by major Islamic screening agencies. The company designs semiconductor chips — a neutral technology — and while it serves both civilian and military customers, its core business doesn't violate Sharia principles. There are some concerns worth understanding, but they don't disqualify NVDA under standard screening methodology.

What NVIDIA Does

NVIDIA's business has undergone a remarkable transformation. What started as a gaming graphics card company is now the primary supplier of the AI chips that power every major AI system in the world. Revenue breakdown:

• Data Center (~87% of revenue): H100/A100 AI GPUs for cloud computing, AI training, and inference. The backbone of ChatGPT, Google Gemini, Meta AI, and every major AI model.
• Gaming (~8%): GeForce RTX graphics cards for PC gaming.
• Professional Visualization (~2%): Workstation GPUs for designers, engineers, architects.
• Automotive (~1%): Chips for autonomous driving systems.
• OEM & Other (~2%): Miscellaneous.

Financial Ratios

• Total Debt / Market Cap: ~1% ✅ (Extremely low debt)
• Interest Income / Total Revenue: ~2% ✅ (Within limits)
• Haram Revenue / Total Revenue: Negligible ✅
• Cash / Total Assets: High cash position, low liabilities ✅

NVIDIA is financially exceptional from a Sharia perspective. It carries almost no debt relative to its market cap, and its interest income is modest despite its large cash balance.

Areas of Concern

1. Gaming GPUs

Gaming itself is not haram — playing video games is a matter of personal discretion based on content. Selling GPUs used in gaming is certainly permissible. The concern would only arise if NVIDIA were manufacturing gambling machines or explicit content hardware, which it doesn't. GeForce cards are used for everything from gaming to 3D rendering to scientific research.

2. Military and Defense Applications

NVIDIA sells chips to the US military and government agencies for AI applications. This is the most debated aspect of NVIDIA's business among Islamic scholars. Some argue that any defense revenue is impermissible; others take the view that NVIDIA manufactures a neutral technology (chips) that is used by many customers including governments — it does not manufacture weapons directly.

The defense revenue is a fraction of NVIDIA's data center revenue, and data center revenue itself goes overwhelmingly to commercial cloud providers (Microsoft, Google, Amazon, Meta). Most screening agencies still consider NVDA compliant.

3. Interest Income

NVIDIA holds billions in cash and earns interest on it. This interest represents roughly 2% of total revenue — under the 5% threshold. Purification applies: donate approximately 2% of any dividends to charity.

Is AI Itself Halal?

This is a question many Muslim investors ask. AI technology is neutral — it can be used for beneficial or harmful purposes. NVIDIA makes the chips; how they're used is determined by the companies and individuals buying them. Manufacturing neutral technology doesn't make NVIDIA impermissible any more than Intel selling processors used in adult websites makes Intel haram.

Screening Agency Verdicts

• MSCI Islamic Index — Included ✅
• S&P 500 Sharia Index — Included ✅
• Zoya App — Compliant ✅
• SPUS ETF — Held ✅
• HLAL ETF — Held ✅

NVIDIA as a Halal Investment

Given its enormous growth and central role in AI infrastructure, NVIDIA has been one of the best-performing stocks over the past five years. For Muslim investors who want technology exposure aligned with Sharia principles, NVDA represents a strong option — its business is primarily chip design and manufacturing, which is entirely permissible, and it passes all standard financial screens.

Purification amount: approximately 2% of dividends (NVIDIA pays a very small dividend, so this is minimal).