Nvidia, a chipmaker known for its role in the artificial intelligence (AI) industry, has reported a significant increase in profits, growing sevenfold to $14.88 billion in the first quarter. This announcement has led to a surge in the company’s shares, reaching a record high.
Based in Santa Clara, California, Nvidia saw its net income rise from $2.04 billion in the previous year to $14.88 billion in the first quarter, along with a tripling of revenue to $26.04 billion – surpassing analysts’ expectations. The company also shared its forecast for the second quarter, expecting revenue to reach $28 billion, representing a 2 percent increase from previous estimates.
In another strategic move, Nvidia revealed plans to split its shares 10 for 1, effective June 7, in an effort to make them more accessible to investors. Additionally, the company announced a 150 percent increase in its quarterly dividend to 1 cent per share. This stock split aims to increase the number of shares available without impacting the market capitalization, thus making each share more affordable for potential investors.
The surge in Nvidia’s shares, which have already climbed over 90 percent this year, propelled the stock price above $1,000. CEO Jensen Huang expressed his excitement during a conference call with analysts, stating that the “next industrial revolution has begun” as companies and countries partner with Nvidia to transition traditional data centers into accelerated computing facilities focused on artificial intelligence.
Huang acknowledged the growing demand for Nvidia’s chips and anticipated a continuous need to meet orders, as the company plays a crucial role in powering the AI ambitions of tech giants like Google, Meta, OpenAI, and Amazon. In fact, Nvidia recently surpassed Saudi Aramco to become the world’s third most valuable company, trailing only behind Apple and Microsoft, with a market value exceeding $2.1 trillion.
Looking ahead, Nvidia is poised to continue driving innovation in the AI sector and meeting the escalating demand for its products. With a strong financial performance in the first quarter and optimistic forecasts for the future, the company remains a key player in shaping the future of technology and data processing.
Article Source
https://www.aljazeera.com/economy/2024/5/23/chk-nvidias-profits-soar-as-ai-boom-shows-no-sign-of-slowing-down
