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Nvidia Shares Soar 4% After Earnings Beat Forecasts, Announces Stock Split, Dividend Hike
Nvidia (NVDA) earnings reported in the first quarter after Wednesday’s bell that beat expectations while also announcing a 10-for-1 stock split and dividend increase, following some of its Big Tech peers in doling out heftier quarterly payouts to shareholders.
The company reported adjusted earnings per share (EPS) of $6.12 on revenue of $26 billion, a jump of 461% and 262%, respectively, from the previous year.
Analysts were expecting adjusted earnings per share of $5.65 and revenue of $24.69 billion, according to Bloomberg data. The company reported adjusted earnings per share of $1.09 on revenue of $7.19 billion in the same quarter last year.
In the current quarter, Nvidia expects revenue of $28 billion, plus or minus 2%. That’s better than the $26.6 billion expected by analysts.
Nvidia shares rose as much as 4% in extended trading Wednesday.
“Our data center growth was driven by strong and accelerating demand for generative AI training and inference on the Hopper platform,” Nvidia CEO Jensen Huang said in a statement. , sovereign AI, automotive and healthcare customers, creating multiple multi-billion dollar vertical markets.”
Wall Street analysts have already raised concerns about the portion of Nvidia’s data center revenue that comes from hyperscalers like Microsoft (MSFT), Google (GOOG, Google), Amazon (AMZN) and other Big Tech names. This is especially true when these companies launch their own AI accelerator chips.
Still, even though the use of non-hyperscale Nvidia chips is growing, CFO Colette Kress said in his own comment that large cloud providers accounted for about 40% of the company’s data center revenue.
Nvidia’s data center revenue increased 427% year over year to $22.6 billion, representing 86% of the company’s total revenue for the quarter. Nvidia’s gaming segment, which was previously its most important business, recorded revenue of $2.6 billion
The company’s stock split – in which shareholders will receive 10 shares for every share of the company’s stock they currently own – will take effect on June 7, and its new dividend will be paid on June 28 to shareholders as of June 11.
The stock split will likely fuel speculation that Nvidia could be added to the Dow Jones Industrial Average (^DJI), joining Big Tech competitors like Apple (AAPL), Amazon and Microsoft. Nvidia shares were trading near $980 per share after trading on Wednesday, meaning the shares were expected to trade at $98 after the split.
The story continues
Nvidia’s beefed-up dividend also follows similar moves announced so far this year names like Meta (GOAL) and Alphabet, which started quarterly dividends for the first time, and Apple, which raised its dividend earlier this month.
NVIDIA CEO Jensen Huang displays products on stage during the Nvidia GTC Annual Artificial Intelligence Conference at the SAP Center in San Jose, California, March 18, 2024. (Photo by JOSH EDELSON/AFP) (Photo by JOSH EDELSON /AFP via Getty Images ) (JOSH EDELSON via Getty Images)
Email Daniel Howley at dhowley@yahoofinance.com. Follow him on Twitter at @DanielHowley.
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