Nvidia’s Earnings Blow Away Forecasts, Stock Skyrockets

Key Takeaways

  • Nvidia reported first-quarter earnings with a 461% increase in EPS and a 262% rise in revenue year-over-year, far exceeding analyst expectations.

  • The announcement of a 10-for-1 stock split and increased dividend highlights Nvidia’s commitment to enhancing shareholder value and making its stock more accessible.

  • Nvidia projects continued growth driven by high demand for AI technology across multiple sectors, positioning it as a leader in the evolving tech landscape.


Introduction

Nvidia (NVDA) has once again shattered expectations, cementing its position as a powerhouse in the tech industry. On Thursday, 23rd of May,  its stock rocketed up by 9%, breaching the $1,000 mark and catapulting its market cap beyond $2.5 trillion. This surge followed an extraordinary earnings report that left analysts and investors in awe. 

Read More: Retail Trading and Financial Markets: Does Earnings Season Have An Impact on Forex?

Stellar First-Quarter Results

Released after the bell on Wednesday, Nvidia’s first-quarter 2024 results were nothing short of spectacular. Adjusted earnings per share (EPS) came in at $6.12, on a staggering $26 billion in revenue. These figures represent year-over-year increases of 461% and 262%, respectively. Analysts who had predicted an EPS of $5.65 on $24.69 billion in revenue were left scrambling to adjust their models.

Stock Split and Increased Dividend

In addition to these outstanding numbers, Nvidia announced a 10-for-1 stock split and an increased dividend. This move mirrors the recent trends among Big Tech peers who are boosting shareholder returns. The stock split will take effect on June 7, and shareholders will see the new dividend on June 28.

Speculation About Joining the Dow

The stock split, which will reduce Nvidia’s trading price to around $98 post-split, is fueling speculation that Nvidia could join the Dow Jones Industrial Average, alongside tech giants like Apple, Amazon, and Microsoft.

Strong Future Outlook

Nvidia’s forecast for the current quarter continues its trend of outperformance. The company expects revenue of $28 billion, plus or minus 2%, exceeding analysts’ expectations of $26.6 billion. CEO Jensen Huang attributed this growth to surging demand for generative AI training and inference, driven by the Hopper platform. Huang highlighted that this demand spans across various sectors, including consumer internet, enterprise, automotive, and healthcare, creating multiple multibillion-dollar markets.

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Conclusion: Investing in Emerging Technology Startups and Enterprises

Nvidia’s impressive earnings report and subsequent stock surge signal a robust growth trajectory driven by high demand for AI technology. Nvidia’s decision to boost its dividend follows similar actions from Meta, Alphabet, and Apple, reflecting a broader trend of tech companies rewarding their shareholders with regular payouts. Nvidia’s phenomenal growth story shows no signs of slowing down. As the company navigates challenges and seizes new opportunities, investors will be keenly watching its next moves. Overall, the company’s strong performance and strategic decisions are likely to keep it an attractive prospect for both current and potential investors.

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Jeff Sekinger

Founder & CEO, Nurp LLC

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