Nvidia Smashes Q1 2024 Estimates, Plans 10-for-1 Stock Split in June

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On Wednesday, American technology giant Nvidia (NVDA) announced its Q1 2024 earnings report. The company’s performance exceeded expectations for both sales and earnings, resulting in a significant rise in its stock price.

The company’s performance highlights the ongoing robust demand for artificial intelligence (AI) chips, with notable gains in its data center sales and networking parts.

Nvidia’s Strong Q1 2024 Earnings Boost AI Market Confidence

Nvidia reported revenue of $26.04 billion, surpassing the expected $24.65 billion. The chipmaker also saw a significant increase in net income, reaching $14.88 billion, or $5.98 per share. In comparison, in Q1 2023, Nvidia’s net income was $2.04 billion, or $0.82 per share.

Nvidia’s data center category, including AI chips and components for AI servers, saw a 427% increase in revenue to $22.56 billion. Colette Kress, Nvidia’s Chief Financial Officer (CFO), attributed this growth to shipments of Hopper graphics processors, including the H100 GPU. She highlighted Meta’s Lama 3 announcement, which utilized 24,000 H100 GPUs, as a key driver.

Nvidia’s Quarterly Performance Summary (2023 – 2024). Source: Nvidia

Networking revenue also surged, reaching $3.17 billion, over three times higher than Q1 on the previous year. Nvidia’s InfiniBand products significantly contributed to this growth by supporting the connection of vast chip clusters.

Additionally, Nvidia’s gaming revenue rose 18% to $2.65 billion, driven by strong demand for its hardware. The company also reported $427 million in professional visualization sales and $329 million in automotive sales.

CEO Jensen Huang emphasized that demand for Nvidia’s AI chips remains robust. The company anticipates revenue from its next-generation AI chip, Blackwell, later this year.

According to its official website, the Blackwell GPU architecture features six transformative technologies for accelerated computing. These technologies will help unlock breakthroughs in data processing, engineering simulation, electronic design automation, computer-aided drug design, quantum computing, and generative AI.

“We are poised for our next wave of growth. The Blackwell platform is in full production and forms the foundation for trillion-parameter-scale generative AI,” Huang said.

Nvidia repurchased $7.7 billion of shares during the quarter and paid $98 million in dividends. On the same day, Nvidia announced a 10-to-1 forward stock split to make stock ownership more accessible.

Each record holder of common stock as of June 6, 2024, will receive nine additional shares to be distributed after market close on June 7, 2024. Split-adjusted trading will begin on June 10, 2024.

Nvidia also increased its quarterly cash dividend from $0.04 to $0.10 per share on a pre-split basis. Post-split, the dividend will be $0.01 per share. Looking ahead, Nvidia projects $28 billion in revenue for this quarter.

NVDA’s price skyrocketed after the announcement, surpassing the $1,000 mark. During the US stock market after hours, at 17:32 ET, NVDA traded at $1,019. Yet, its price has now been corrected to $1,007 at the time of writing.

NVDA Price Performance. Source: Google Finance

Optimism surrounding Nvidia’s performance extends to the crypto market, particularly AI-related tokens. In the past seven days, some major AI tokens, such as Fetch.AI (FET), Render (RNDR), SingularityNET (AGIX), and Bittensor (TAO), enjoyed an increase of roughly 10% to 20%. However, shortly after the earnings report release, these tokens entered correction phases, signaling sell-the-news actions from the investors.