Nvidia is on a winning streak, with its first-quarter earnings report beating expectations and exciting investors with a 10-for-1 stock split and an increased dividend. Following in the footsteps of other tech giants, Nvidia is rewarding its shareholders with bigger quarterly payouts.
The numbers are impressive. Nvidia reported adjusted earnings per share (EPS) of $6.12 on revenue of $26 billion, marking a staggering 461% and 262% increase, respectively, from a year ago. Analysts had predicted adjusted EPS of $5.65 on revenue of $24.69 billion, but Nvidia surpassed these estimates. In the same quarter last year, the company reported adjusted EPS of $1.09 on revenue of $7.19 billion, highlighting its remarkable growth trajectory.
Looking ahead, Nvidia expects revenue of $28 billion plus or minus 2% for the current quarter, exceeding analysts’ expectations of $26.6 billion. This positive outlook has contributed to a 4% rise in Nvidia’s stock in extended trading.
CEO Jensen Huang attributed the company’s data center growth to strong demand for generative AI training and inference on the Hopper platform. This demand is not limited to cloud service providers but extends to consumer internet companies, enterprise clients, sovereign AI projects, automotive manufacturers, and healthcare providers. These developments are creating multiple multibillion-dollar markets for Nvidia.
Despite concerns about the share of Nvidia’s Data Center revenue coming from hyperscalers like Microsoft, Google, and Amazon, Nvidia remains optimistic. CFO Colette Kress revealed that large cloud providers accounted for approximately 45% of the company’s Data Center revenue, indicating a diversification of Nvidia’s customer base.
Nvidia’s Data Center revenue soared 427% year-over-year to $22.6 billion, representing 86% of the company’s total revenue for the quarter. In contrast, the gaming segment, once Nvidia’s primary revenue source, reported revenue of $2.6 billion.
The stock split, scheduled for June 7, will see shareholders receive 10 shares for every one share they currently own. Additionally, the increased dividend will be paid on June 28 to shareholders as of June 11. Nvidia’s stock was trading near $980 per share in after-hours trading, implying a post-split price of $98.
With these strong financials and shareholder-friendly moves, speculation is rife that Nvidia could be added to the Dow Jones Industrial Average, joining the ranks of Apple, Amazon, and Microsoft. As Nvidia continues to innovate and expand its market reach, investors are eagerly anticipating its next big move.
(Source: Nvidia Press Release | NYT | WSJ)
