Nvidia Shares Up 7% to $1,000 After Beating Earnings Expectations, Announces Stock Split and Dividend Hike

Nvidia (NVDA) reported first-quarter earnings after the bell Wednesday that topped expectations, while also announcing a 10-to-1 stock split and an increased dividend, following some of its Big Tech peers in paying higher quarterly payments to shareholders.

The company reported adjusted earnings per share (EPS) of $6.12 on revenue of $26 billion, up 461% and 262%, respectively, from the prior year.

Analysts expected adjusted EPS of $5.65 on revenue of $24.69 billion, according to Bloomberg data. During the same quarter last year, the company reported adjusted EPS of $1.09 on revenue of $7.19 billion.

For the current quarter, Nvidia expects revenue of $28 billion, plus or minus 2%. That was higher than analysts’ expectations of $26.6 billion.

Nvidia shares rose almost 7% on Thursday, reaching above $1,000 in pre-market trading.

“The growth of our data center has been driven by strong and growing demand for generative AI training and inference on the Hopper platform,” Nvidia CEO Jensen Huang said in a statement. “Beyond cloud service providers, generative AI has expanded into consumer internet and enterprise companies, sovereign AI customers, automotive and healthcare, creating multiple multi-billion dollar vertical markets.”

Wall Street analysts have previously raised concerns about Nvidia’s share of data center revenue from hyperscalers like Microsoft (MSFT), Google (GOOG, GOOGL), Amazon (AMZN) and other big tech companies. This is especially true as these companies deploy their own AI acceleration chips.

Still, while use of Nvidia’s non-hyperscale chips is growing, CFO Colette Kress said in a commentary that large cloud providers account for about 45% of the company’s data center revenue.

Nvidia’s data center revenue increased 427% year-over-year to $22.6 billion, accounting for 86% of the company’s total revenue in the quarter. Kress, however, pointed out that revenue from China fell significantly in the quarter because the company was forced to halt shipments of its most powerful chips to the country. Moreover, it said it expects the market in the region to remain highly competitive in the future.

Nvidia’s gaming segment, previously its most important business, posted revenue of $2.6 billion.

The company’s stock split – in which shareholders will receive 10 shares for each share of the company they currently hold – will take effect on June 7, and the new dividend will be paid to shareholders on June 28, commencing on June 11.

The stock split is likely to fuel speculation that Nvidia could be added to the price-weighted Dow Jones Industrial Average (^DJI), joining Big Tech competitors like Apple (AAPL), Amazon and Microsoft. Nvidia’s stock was trading near $980 per share in after-hours trading on Wednesday, meaning Nvidia’s stock is expected to trade at $98 after the split.

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Nvidia’s increased dividend also follows similar moves announced so far this year by companies such as Meta (META) and Alphabet, which initiated a quarterly dividend for the first time, and Apple, which raised its dividend earlier this month.

Email Daniel Howley at [email protected]. Follow him on Twitter at @DanielHowley.

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