Nvidia Q1 Earnings: Profits Soar 600%, Company Announces Dividend Hike and Stock Split
Nvidia has once again outperformed Wall Street's expectations with the release of its Q1 earnings after the bell today.
Nvidia (NASDAQ: NVDA), the tech giant renowned for its advanced AI capabilities and GPU technology also announced a 10-for-1 stock split and a dividend hike, reflecting its robust financial health and growth prospects.
For the first quarter ended April 28, 2024, Nvidia reported adjusted earnings per share (EPS) of $6.12 on revenue of $26 billion. This represents a staggering increase of 461% in EPS and 262% in revenue compared to the same period last year. These figures surpassed analysts’ expectations, who had projected an EPS of $5.60 on revenue of $24.59 billion. Nvidia’s stock surged over 4% in after-hours trading, topping $1,000 per share before adjusting for the upcoming stock split.
The company’s exceptional performance was primarily driven by its data center segment, which saw a 427% year-over-year revenue jump to $22.6 billion. This division now accounts for a dominant 86% of Nvidia’s total revenue for the quarter.
The surge in data center revenue is largely due to the escalating demand for AI training and inference on Nvidia’s Hopper platform. This platform is pivotal for powering various AI applications, including large language models and generative AI, which have seen increasing adoption across different sectors such as consumer internet, enterprise, sovereign AI, automotive, and healthcare.
Nvidia CEO Jensen Huang highlighted the expanding market for generative AI beyond traditional cloud service providers to other significant sectors, creating multiple multibillion-dollar vertical markets. Despite concerns about the reliance on hyper scalers like Microsoft (NASDAQ: MSFT), Alphabet (NASDAQ: GOOGL), and Amazon (NASDAQ; AMZN), Nvidia’s non-hyper scaler customer base is growing, indicating a broadening demand for its AI capabilities.
Commenting on the company’s strong Q1 results, Nvidia founder and CEO Jensen Huang, stated:
“The next industrial revolution has begun — companies and countries are partnering with NVIDIA to shift the trillion-dollar traditional data centers to accelerated computing and build a new type of data center — AI factories — to produce a new commodity: artificial intelligence. AI will bring significant productivity gains to nearly every industry and help companies be more cost- and energy-efficient, while expanding revenue opportunities.”
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However, Nvidia faced challenges in China, where its revenue declined due to restrictions on shipping its most powerful chips to the region. This issue underscores the competitive landscape and geopolitical factors that Nvidia must navigate.
The company also announced a 10-for-1 stock split, effective June 7, making its shares more accessible to a broader range of investors and employees. Post-split, Nvidia shares, trading around $980, will adjust to approximately $98 each. This move is anticipated to spark speculation about Nvidia’s potential inclusion in the Dow Jones Industrial Average, joining other Big Tech titans like Apple, Amazon, and Microsoft.
In addition to the stock split, Nvidia increased its quarterly cash dividend by 150% to $0.10 per share. This aligns with similar actions from other tech giants like Meta (NASDAQ: META), Alphabet, and Apple (NASDAQ: AAPL), who have also boosted their dividends recently.
Looking ahead, Nvidia forecasts revenue of $28 billion for the next quarter, plus or minus 2%, which exceeds analysts’ expectations of $26.6 billion. The company also projects an adjusted gross margin of 75.5% for the upcoming quarter. Analysts from Goldman Sachs noted that these metrics met elevated investor expectations, reflecting confidence in Nvidia’s sustained growth trajectory.
In summary, Nvidia’s latest earnings report underscores its dominant position in the AI and data center markets, with record-breaking profits and revenues. The company’s strategic decisions, including the stock split and dividend hike, are poised to enhance shareholder value and broaden its investor base. As Nvidia continues to innovate and expand its AI capabilities, it remains a pivotal player in the tech industry’s evolving landscape.
Shares of Nvidia closed today at $949.50, down -0.46%. In after-hours trading, NVDA stock is up +6.01%. YTD, NVDA stock is up +97.12%. All-time, NVDA shares are up a staggering +231,485.37%.
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Disclaimer: Wealthy VC does not hold a long or short position in any of the stocks, ETFs or cryptocurrencies mentioned in this article.
