According to CNBC, “Nvidia’s quarterly earnings report has become a way for investors to gauge the strength of the AI boom that has transfixed markets in recent months. Its strong results on Wednesday suggest that demand for the AI chips Nvidia makes remains robust, and CEO Jensen WHO-Ahng said the company would see revenue from its next-generation AI chip, called Blackwell, later this year.
The stock rose 7% in extended trading. Nvidia also said it was splitting its stock 10 to 1. Based on the after-market move, the shares are poised to reach a fresh high on Thursday.”
Shares topped $1,000 for the first time in extended trading on Wednesday. “The chipmaker reported net income for the quarter ended April 28 of $14.88 billion, or $5.98 per share, compared with $2.04 billion, or 82 cents, in the year-earlier period.” (source)
The main push for Nvidia sales booming is thanks to the larger tech companies such as Google, Microsoft, Meta, Amazon, and OpenAI. These companies are buying Nvidia’s “graphics processing units, which are advanced and pricey chips required for developing and deploying artificial intelligence applications,” explains CNBC.
“Nvidia said its data center category rose 427% from the year-ago quarter to $22.6 billion in revenue. Nvidia’s finance chief Colette Kress said in a statement that it was due to shipments of the company’s Hopper graphics processors, which include the company’s H100 GPU.” (source)
Nvidia also announced a 10-for-1 forward stock split. On Wednesday the shares closed at $949.50 and with a 10-for-1 split, each share would cost $94.95. This means an individual would “have to buy 10 of them to own the same amount of the company as they currently get with one share,” CNBC explains.
Nvidia investors have enjoyed a historic rally over the past five years, with the stock price soaring by 25-fold. The company was long known as the primary maker of advanced graphics processing units (GPUs) for video games, but has emerged of late as the central hardware player in the artificial intelligence boom.
Revenue in Nvidia’s fiscal first quarter soared 262% from the year earlier period, marking the third straight quarter of growth in excess of 200%.
CNBC also notes that, “The company also sells chips for cars and chips for advanced graphics workstations, which remain much smaller than its data center business. It reported $427 million in professional visualization sales, and $329 million in automotive sales.
Nvidia said it bought back $7.7 billion worth of its shares and paid $98 million in dividends during the quarter. Nvidia also said that it’s increasing its quarterly cash dividend from 4 cents per share to 10 cents on a pre-split basis. After the split, the dividend will be a penny a share.”
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