Nvidia Forecasts Quarterly Revenue Above Estimates, Announces Stock Split
Nvidia forecasts quarterly revenue above estimates, impressing investors. Company announces stock split and increase in quarterly dividend. Nvidia's dominance in the AI chip market remains strong.
The company's shares soared to record highs, impressing investors who have seen the company's market value triple in the past year due to optimism surrounding AI technology.
Following the announcement, Nvidia's shares jumped 5.9% to US$1,005 in after-hours trading, surpassing the significant US$1,000 mark and adding approximately US$140 billion to its stock market value. This year alone, the company's stock has surged by an impressive 90%. If the stock maintains its after-hours price during the next day's Wall Street trading session, it will set a new record high.
In addition to the revenue forecast, Nvidia revealed plans to split its stock ten-for-one, effective on June 7. The company also announced a 150% increase in its quarterly dividend to 1 cent per share, on a post-split basis.
Ryan Detrick, the chief market strategist at Carson Group, expressed his confidence in Nvidia's performance, stating, "Death, taxes, and NVDA beats on earnings. Even in the face of huge expectations, the company once again stepped up and delivered." Detrick highlighted the strong data center revenue and impressive future revenue as key factors contributing to Nvidia's success.
Nvidia's earnings report is expected to have a significant impact on the stock market rally, which has propelled indexes to record highs this year. Rival AI-related chipmakers, such as Advanced Micro Devices and Broadcom, saw their shares rise by approximately 2% following Nvidia's announcement. Tech giants like Alphabet, Microsoft, and Amazon.com have been vying for Nvidia's high-end chips as they compete to dominate the AI computing industry.
During a conference call with analysts, Nvidia's CEO Jensen Huang revealed that the company's upcoming Blackwell AI chips will begin shipping in the current fiscal quarter, with production ramping up in the following quarter. Chief Financial Officer Colette Kress added that demand for Blackwell chips could exceed supply well into next year.
Nvidia's dominance in the AI chip market is evident, with the company holding over 80% of the market share. Its sales in the data center segment, the largest revenue generator, grew by an impressive 427% to $22.6 billion in the first quarter. This exceeded estimates of US$21.320 billion, according to data from FactSet.
With its high-performance chips and proprietary CUDA software framework, Nvidia remains difficult to replace in AI data centers. While other companies are developing their own custom AI chips, analysts believe that Nvidia's market share will remain strong.
Looking ahead, Nvidia forecasts second-quarter revenue of US$28 billion, with a margin of plus or minus 2%. This exceeds the average analyst expectation of US$26.66 billion. In the first quarter, Nvidia reported a revenue surge of 262% year-over-year to $26.04 billion, beating estimates of US$24.65 billion. Net income also soared by 628% to US$14.88 billion.
Nvidia forecasts quarterly revenue above estimates, impressing investors
Company announces stock split and increase in quarterly dividend
Nvidia's dominance in the AI chip market remains strong
Source: REUTERS