Nvidia’s stock surged past $1,000 per share in after-hours trading on Wednesday after the company reported impressive first-quarter results that topped Wall Street estimates and announced a ten-for-one forward stock split.
For the quarter ended April 28, 2023, Nvidia reported adjusted earnings of $6.12 per share on revenue of $26.04 billion, a significant improvement from the $1.09 per share on revenue of $7.19 billion in the same period last year. Analysts had projected earnings of $5.58 per share on revenue of $24.53 billion.
The earnings growth was driven by a staggering 427% increase in data center revenue to $22.56 billion, surpassing analyst estimates of $21.32 billion. This growth was attributed to robust demand for AI applications in the data center business, particularly increased shipments of the NVIDIA Hopper GPU computing platform used for training and inferencing with large language models, recommendation engines, and generative AI applications.
Looking ahead, Nvidia forecasts second-quarter revenue of $28 billion, surpassing analyst estimates of $26.54 billion, and expects an adjusted gross margin of 75.5%. Many analysts remain bullish on Nvidia’s stock, with price targets ranging from $989 to $1,177 per share, citing the company’s dominance in the AI market and strong demand for its GPUs.
The ten-for-one forward stock split, effective June 7, 2023, aims to make Nvidia’s stock more accessible to employees and investors. The company also increased its quarterly cash dividend by 150% to $0.10 per share.
Despite some concerns about potential competition and a possible cyclical downturn in the future, Nvidia’s CEO Jensen Huang sees demand for generative artificial intelligence training “accelerating”, positioning the company for continued growth in the near term.
