Santa Clara, California – Nvidia shared its first-quarter earnings report on Wednesday, surpassing expectations by announcing a 10-for-1 stock split and an increased dividend. The tech giant reported adjusted earnings per share of $6.12 on revenue of $26 billion, marking significant increases from the previous year.
Analysts had predicted adjusted EPS of $5.65 on revenue of $24.69 billion, making Nvidia’s actual performance a pleasant surprise. The company’s outlook for the current quarter also exceeded analysts’ expectations, with projected revenue of $28 billion.
Nvidia’s stock surged nearly 7% in pre-market trading, reaching above $1,000. CEO Jensen Huang credited the company’s data center growth to strong demand for generative AI training and inference on the Hopper platform.
While Nvidia’s Data Center revenue experienced a substantial 427% year-over-year increase to $22.6 billion, concerns lingered about the significant reliance on cloud providers for this revenue stream. CFO Colette Kress revealed that around 45% of the company’s Data Center revenue came from large cloud providers, highlighting potential vulnerabilities.
Despite the growth in non-hyperscaler usage of Nvidia chips, challenges persist in the Chinese market due to halted chip shipments. Nvidia’s gaming segment revenue was reported at $2.6 billion, reflecting a shift from its historically dominant position.
The stock split, scheduled for June 7, and increased dividend further indicate Nvidia’s efforts to enhance shareholder value. These moves align with industry trends as other tech giants like Meta, Alphabet, and Apple have also implemented similar measures in recent months.
Nvidia’s robust financial performance and strategic initiatives position the company for continued growth and potential inclusion in key market indices like the Dow Jones Industrial Average. The tech sector’s ongoing evolution and Nvidia’s response to market dynamics underscore the competitive landscape and growth opportunities within the industry.