Nvidia’s Stock Split and Strong Earnings Forecast Boost Shares to Record Highs
In a move that surprised and delighted investors, Nvidia announced a stock split and forecasted quarterly revenue above estimates on Wednesday. The chipmaker’s shares soared to record-high territory, jumping 5.9% to $1,005 in extended trade.
The AI powerhouse has seen its stock surge 90% so far this year, with a close at Wednesday’s after-hours price potentially setting a new record high in the next day’s Wall Street trading session. The company, based in Santa Clara, California, said it would split its stock ten-for-one, effective on June 7, and raise its quarterly dividend by 150% to 1 cent per share on a post-split basis.
“Death, taxes, and NVDA beats on earnings. Even in the face of huge expectations, the company once again stepped up and delivered,” said Ryan Detrick, chief market strategist at Carson Group. “The always important data center revenue was strong, while future revenue was also impressive.”
Nvidia’s earnings report could provide fresh fuel to the stock market rally that has pushed indexes to record highs this year. Following the news, shares of rival AI-related chipmakers Advanced Micro Devices and Broadcom each rose about 2%.
CEO Jensen Huang revealed during a conference call with analysts that Nvidia’s upcoming Blackwell AI chips will begin shipping in the current fiscal quarter, with production ramping up in the following quarter. Chief Financial Officer Colette Kress noted that demand for Blackwell chips could exceed supply well into next year.
Nvidia’s dominance in the market for AI chips remains strong, with sales in the data center segment growing 427% to $22.6 billion in the first quarter. The company’s high-performance chips, coupled with its proprietary CUDA software framework, make them difficult to replace in present AI data centers.
With Nvidia expecting second-quarter revenue of $28 billion, plus or minus 2%, analysts are optimistic about the company’s future prospects. The company reported first-quarter revenue of $26.04 billion, beating estimates of $24.65 billion, and net income soared 628% to $14.88 billion.
“Demand for NVIDIA’s GPU chips remains white-hot,” said analyst Logan Purk. “These results are likely enough to satiate investors’ appetites and reassure the market that AI investment has not seen a slowdown yet.”
Nvidia’s strong performance and optimistic outlook have positioned the company as a key player in the AI industry, with its market share expected to remain dominant despite competition from other hyperscalers developing their own custom AI chips.
