Nvidia stock is gaining momentum on blockbuster earnings report and stock split plan

Shares Nvidia (NVDA -0.46%) rose 6.1% in after-hours trading on Wednesday after the artificial intelligence (AI) technology leader released an exceptionally strong report for the first quarter of fiscal 2025 (ended April 28).

The main catalysts for the stock’s rise include revenue and earnings for the quarter that easily exceeded Wall Street expectations, second-quarter earnings and earnings guidance holding the same, and the company announcing a 10-to-1 stock split.

The first quarter was Nvidia’s fourth consecutive quarter of triple-digit percentage growth in both revenue and adjusted earnings per share (EPS).

Nvidia’s key numbers

Data source: Nvidia. YOY = year by year. GAAP = Generally Accepted Accounting Principles. The first fiscal quarter of 2025 ended on April 28, 2024.

Investors should focus on adjusted numbers, which exclude one-time items.

Wall Street expected adjusted EPS of $5.59 on revenue of $24.65 billion, so Nvidia rushed those expectations. It also beat its own revenue guidance and adjusted EPS of $24 billion and $5.41, respectively.

Platform performance

Data source: Nvidia. OEM = Original Equipment Manufacturer; OEM and others are not a target market platform. YOY = year by year. QOQ = quarter by quarter.

Data center segment revenues accounted for approximately 87% of Nvidia’s total revenues, up from 83% in the previous quarter. The growth of this segment is driven by the incredible demand for Nvidia’s products that enable the use of artificial intelligence.

In a comment, CFO Colette Kress said the significant data center expansion reflects “greater delivery of the NVIDIA Hopper GPU (GPU) compute platform used for training (AI) and inference (AI) with large language models, recommendation engines and generative tools. AI applications” along with strong demand for the company’s networking products.

Generative AI is the technology behind OpenAI’s wildly popular ChatGPT chatbot, released in late 2022. It significantly expands the potential use cases of AI.

Share split and dividend increase

Information about Nvidia’s results also included the announcement of a stock split. Last month, I explored why an Nvidia stock split is likely and the potential benefits for investors from a stock split.

The stock split is a 10-to-1 split. After the market close on Friday, June 7, investors will receive nine additional shares of Nvidia for each share they own, starting at the market close on Thursday, June 6. The company expects trading in the shares to begin on an adjusted split basis on Monday, June 10.

Nvidia also announced that it is increasing its quarterly cash dividend by 150% from $0.04 per share to $0.10 per share. The increased dividend will be $0.01 per share after the split. The dividend will be paid on Friday, June 28, and to registered shareholders on Tuesday, June 11.

Nvidia’s dividend is modest, but any growth is certainly positive. At Wednesday’s market close, the current dividend was 0.017%.

Forecasts for the second quarter

For the second quarter of fiscal 2025 (which ends in late July), management expects revenue of $28 billion, up 107% year-over-year. It also led (albeit indirectly by providing a number of inputs) to adjusted EPS of $6.22, an increase of 130%.

At the time of the report, Wall Street was modeling Q2 2025 adjusted EPS of $5.95 on revenue of $26.66 billion, so the company’s outlook is stronger than expected.

In short, Nvidia’s report was excellent. The company’s data center products based on its next-generation Blackwell GPU architecture are in full production, and CEO Jensen Huang said in the earnings release that the company expects the products to help fuel the “next wave of growth.”