Nvidia surges as financials smash forecasts, stock-split promises a more accessible share price
Nvidia (NASDAQ:NVDA) stock initially shot up around 7.5% in ‘afterhours’ trade after the microchip maker once again smashed through Wall Street forecasts.
Besides impressive financials, Nvidia promised returns to shareholders with a 150% increase in its quarterly dividend, to 10 cents from 4 cents.
Nvidia also intends to re-organise its share capital with a 10-for-1 stock split which it says will make owning the stock, presently priced above $1,000 per share, more accessible to investors and employees as they should be closer to $100 each.
An expectation-beating quarter
Nvidia reported first-quarter revenue of $26 billion, up 262% from the same period a year ago, and comfortably above market expectations pitched at $24.6 billion.
The emphatic performance continues to be driven by growth in its data-center division, which is being superpowered by the demand for AI computing. The business unit marked 427% year-on-year revenue growth, rising to $22.6 billion (beating forecasts for $21.3 billion).
First quarter earnings were reported at $6.12 per share, versus $1.09 a year ago and beating market forecasts of $5.60.
Moreover, Nvidia also impressed the market with its latest guidance for its second quarter which foresees $28 billion of revenue which is ahead of the $26.7 billion that Wall Street analysts had pencilled in.
In New York, Nvidia shares were up $54.00 or 5.73% changing hands at $1003.50 in ‘afterhours’ dealing.
The next industrial revolution
Chief executive Jensen Huang told investors that Nvidia is “poised for the next wave of growth”, which is quite a claim for a company that’s been growing at a rate that it has over the past year.
In case anybody missed it, this growth is being driven by the demand for AI computing – which Nvidia microchips are uniquely well-positioned to supply.
Across the world there are aggressive plans to build out the data-center capacity to support the exciting AI ambitions that ‘big-tech’ has spent the last year laying out.
“The next industrial revolution has begun — companies and countries are partnering with NVIDIA to shift the trillion-dollar traditional data centers to accelerated computing and build a new type of data center — AI factories — to produce a new commodity: artificial intelligence,” Jensen Huang said in a statement.
“AI will bring significant productivity gains to nearly every industry and help companies be more cost- and energy-efficient, while expanding revenue opportunities.
Huang added: “Our data center growth was fueled by strong and accelerating demand for generative AI training and inference on the Hopper platform.
“Beyond cloud service providers, generative AI has expanded to consumer internet companies, and enterprise, sovereign AI, automotive and healthcare customers, creating multiple multibillion-dollar vertical markets.”
