Nvidia (NVDA) stock rose 9.3% on Thursday, closing above $1,000 for the first time, after the semiconductor giant reported first-quarter results that again beat expectations, boosting the semiconductor giant’s market cap to $2.5 trillion. exceeded.
NVIDIA’s first-quarter financial results, released after the bell Wednesday, showed adjusted earnings per share (EPS) of $6.12 and revenue of $26 billion, up 461% and 262%, respectively, from a year earlier. Ta.
The company also announced a 10-for-1 stock split and a dividend increase, following some large tech companies making large quarterly payments to shareholders.
Analysts had expected adjusted EPS of $5.65 and revenue of $24.69 billion, according to Bloomberg data. The company reported revenue of $7.19 billion and adjusted EPS of $1.09 in the year-ago period.
For the current quarter, NVIDIA expects revenue of $28 billion, plus or minus 2%. This exceeded analysts’ expectations of $26.6 billion.
“Our data center growth was driven by strong and accelerating demand for generative AI training and inference on the Hopper platform,” Nvidia CEO Jensen Huang said in a statement. “Generative AI has expanded beyond cloud service providers to consumer internet companies and enterprises,” creating multiple multi-billion dollar vertical markets with sovereign AI, automotive and healthcare customers. . ”
Wall Street analysts have previously expressed concerns about NVIDIA’s share of data center revenue coming from hyperscalers like big tech companies like Microsoft (MSFT), Google (GOOG, GOOGL) and Amazon (AMZN). was. This is especially true if those companies are rolling out their own AI accelerator chips.
In an exclusive interview with Yahoo Finance after the company’s earnings report on Wednesday, Huang dismissed concerns that the company could face weak demand as it switches between current and next-generation AI chips. .
“People want to deploy these data centers now,” Huang said. “They want to get our (graphics processing units) up and running right now to make money and save money. That’s why the demand is so strong.”
Nvidia’s data center revenue rose 427% year-over-year to $22.6 billion and accounted for 86% of the company’s total revenue for the quarter. Nvidia’s gaming division, by far its most important business, had sales of $2.6 billion. Major cloud providers account for about 45% of the company’s data center revenue, CFO Colette Kress said in a statement Wednesday.
JPMorgan analysts led by Harlan Suhr wrote in a note to clients Thursday that NVIDIA “continues to maintain a step or two ahead of its competitors.” JP Morgan raised its price target for Nvidia stock from $850 to $1,150 and reiterated its rating on the stock as “overweight.”
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Kress noted on the company’s earnings call that revenue from China fell significantly in the quarter as the company was forced to halt shipments of its most powerful chips to the country. The company also expects the market in the region to remain highly competitive.
The company’s stock split, in which shareholders will receive 10 shares for every share of the company they currently own, will take effect on June 7, and shareholders as of June 11 will receive a new dividend on June 28.
The stock split could fuel speculation that Nvidia could join the ranks of big tech companies like Apple (AAPL), Amazon, and Microsoft, and be added to the price-weighted Dow Jones Industrial Average (^DJI). Highly sexual.
Nvidia’s dividend enhancement follows similar moves announced so far this year by META and Alphabet, which began paying quarterly dividends for the first time this year, and Apple, which raised its dividend earlier this month. are.
NVIDIA CEO Jensen Huang displays products on stage during the annual Nvidia GTC Artificial Intelligence Conference at the SAP Center in San Jose, California, March 18, 2024. (JOSH EDELSON/AFP via Getty Images) (JOSH EDELSON via Getty Images)
Email Daniel Howley at dhowley@yahoofinance.com. Follow him on Twitter @Daniel Howley.
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