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Nvidia Shares Soar 7% to $1,000 After Earnings Beat Forecasts, It Announces Stock Split and 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 nearly 7% to trade above $1,000 in premarket trading on Thursday.
“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 45% 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. But Kress highlighted that revenue from China fell significantly in the quarter as the company was forced to halt shipments of its most powerful chips to the country. What’s more, she said she expects the region’s market to remain very competitive in the future.
Nvidia’s gaming segment, which was previously its most important business, reported revenue of $2.6 billion.
The company’s stock split – in which shareholders will receive 10 shares for every share of the company they currently own – will take effect on June 7, and its new dividend will be paid on June 28 to shareholders starting June 11.
The stock split will likely fuel speculation that Nvidia could be added to the price-weighted Dow Jones Industrial Average (^DJI), joining Big Tech peers like Apple (AAPL), Amazon and Microsoft. Nvidia shares were trading near $980 per share in 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. (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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