Artificial intelligence technology leader Nvidia (NVDA) late Wednesday beat Wall Street’s targets for its fiscal first quarter and guided higher than views for the current period. It also announced a 10-for-1 stock split. Nvidia stock rose in extended trading.
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The Santa Clara, Calif.-based chipmaker earned an adjusted $6.12 a share on sales of $26 billion in the quarter ended April 28. Analysts polled by FactSet had expected earnings of $5.60 a share on sales of $24.59 billion. On a year-over-year basis, Nvidia’s earnings rocketed 461% while sales blasted 262% higher.
Nvidia’s fiscal Q1 results marked its fourth straight quarter of triple-digit percentage growth in sales and earnings.
For the current quarter, Nvidia expects to generate sales of $28 billion, vs. the consensus estimate of $26.62 billion. In the year-earlier quarter, Nvidia posted sales of $13.51 billion.
Nvidia Stock Jumps After Report
In after-hours trading on the stock market today, Nvidia stock jumped 3.7% to 984.84. During the regular session Wednesday, Nvidia stock dipped 0.5% to close at 949.50.
“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,” Chief Executive Jensen Huang said in a news release.
He added, “AI will bring significant productivity gains to nearly every industry and help companies be more cost- and energy-efficient, while expanding revenue opportunities.”
In the first quarter, Nvidia’s data center sales jumped 427% year over year to $22.6 billion as enterprises snapped up graphics processors to run AI applications. Data center sales increased 23% from the fourth quarter.
Stock Split, Increased Dividend
Nvidia said its 10-for-1 stock split will be effective on June 7.
The company also raised its quarterly cash dividend by 150% to a penny a share on a post-split basis.
Several Investor Worries
Investor concerns heading into Nvidia’s report included the impact of U.S. trade restrictions with China and the company’s ability to source enough components from its contract manufacturers to meet demand.
Analysts also are worried about a potential “air pocket” in sales of current Hopper series graphics processing units when Blackwell series GPUs become available later this year.
The major cloud service providers have been spending heavily on Nvidia GPUs to ramp up their capacity for generative artificial intelligence applications.
‘Get The Popcorn Out’
To say Nvidia’s fiscal Q1 report is being closely watched would be an understatement.
“When Nvidia holds its conference (call), you will be able to hear a pin drop on trading floors across Wall Street when (CEO) Jensen (Huang) gets the microphone,” Wedbush Securities analyst Daniel Ives said Wednesday morning in a client note titled “Get the Popcorn Out.”
He added, “The AI Revolution starts with Nvidia and in our view the AI party is just getting started with the popcorn getting ready.”
Wedbush rates Nvidia stock as outperform with a price target of 1,000.
Nvidia Stock Weighs Heavily In Indexes
Nvidia’s soaring stock price has given it a significant weight in key stock market indexes and exchange-traded funds. As of Monday, Nvidia accounted for 5.3% of the S&P 500, 6.5% of the Nasdaq 100 and 20.6% of the VanEck Semiconductor ETF, Mizuho Securities said.
Last year, Nvidia stock rocketed 239% to 495.22. Year to date through Wednesday’s close, Nvidia stock is up 92%.
The next potential catalyst for Nvidia stock will be Huang’s keynote speech June 2 at the Computex trade show. The chief executives of chipmakers AMD (AMD), Intel (INTC) and Qualcomm (QCOM) also are speaking at the Taiwan show.
Nvidia stock is on five IBD stock lists including Leaderboard, IBD 50, Big Cap 20, Sector Leaders and Tech Leaders.
Further, Nvidia stock is one of the so-called Magnificent Seven stocks that had a huge run last year.
Nvidia stock has been consolidating for the past 11 weeks at a buy point of 974, which is also its all-time high, according to IBD MarketSurge. Last week, Nvidia cleared an early-entry buy point, based on IBD analysis.
Follow Patrick Seitz on X, formerly Twitter, at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.
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Jessica Roberts is a seasoned business writer who deciphers the intricacies of the corporate world. With a focus on finance and entrepreneurship, she provides readers with valuable insights into market trends, startup innovations, and economic developments.
