NVIDIA reported stronger-than-expected first-quarter earnings, along with a 10-for-1 stock split and a higher dividend, following the trend of other Big Tech companies. The company reported adjusted earnings per share of $6.12 on revenue of $26 billion, up significantly from the previous year. Analysts had expected lower earnings of $5.65 per share on revenue of $24.69 billion. Nvidia also announced a revenue outlook of $28 billion for the current quarter, surpassing analyst expectations of $26.6 billion.
The growth in Nvidia’s data center revenue was driven by increased demand for generative AI training and inference on the Hopper platform. Despite concerns from analysts about the company’s reliance on hyperscalers like Microsoft, Google, Amazon, and other tech giants, Nvidia’s CFO disclosed that large cloud providers accounted for about 40% of the company’s data center revenue. Data center revenue increased 427% year over year, reaching $22.6 billion, while the gaming segment posted revenue of $2.6 billion.
The company’s stock split, set to take effect on June 7, will entail shareholders receiving 10 shares for each share they currently own. Nvidia’s new dividend will be paid on June 28 to shareholders owning shares effective June 11. The stock split is expected to fuel speculation about Nvidia’s potential inclusion in the Dow Jones Industrial Average alongside other major tech companies. Nvidia’s stock price was around $980 per share in after-hours trading, suggesting a post-split trading price of $98 per share.
Nvidia’s increased dividend aligns with similar moves by other tech companies like Meta, Alphabet, and Apple, which have either initiated or raised quarterly dividends this year. The company’s CEO, Jensen Huang, highlighted the expanding applications of generative AI across various industries, driving revenue growth and positioning Nvidia as a key player in the AI ecosystem.
In conclusion, Nvidia’s strong first-quarter performance, outlook, stock split, and increased dividend demonstrate the company’s commitment to delivering value to its shareholders and staying competitive in the rapidly evolving tech industry. The company continues to innovate and capitalize on growing demand for AI technologies, solidifying its position as a leader in the semiconductor and data center markets. By diversifying its revenue streams and expanding its customer base, Nvidia is well-positioned for future growth and success in the ever-changing tech landscape.
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