Artificial intelligence technology leader Nvidia late Wednesday beat Wall Street's targets for its fiscal first quarter and guided higher than views for the current period. It also announced a 10-for-1 stock split. Nvidia stock rose in extended trading.
The Santa Clara, Calif.-based chipmaker earned an adjusted $6.12 a share on sales of $26 billion in the quarter ended April 28. Analysts polled by FactSet had expected earnings of $5.60 a share on sales of $24.59 billion. On a year-over-year basis, Nvidia earnings rocketed 461% while sales blasted 262% higher.
Nvidia's fiscal Q1 results marked its fourth straight quarter of triple-digit percentage growth in sales and earnings.
For the current quarter, Nvidia expects to generate sales of $28 billion, vs. the consensus estimate of $26.62 billion. In the year-earlier quarter, Nvidia posted sales of $13.51 billion.
Nvidia Stock Jumps After Report
In after-hours trading on the stock market today, Nvidia stock jumped 5.9% to 1,005.89, which would be record high. During the regular session Wednesday, Nvidia stock dipped 0.5% to close at 949.50, in buy range.
"The next industrial revolution has begun — companies and countries are partnering with Nvidia to shift the trillion-dollar traditional data centers to accelerated computing and build a new type of data center — AI factories — to produce a new commodity: artificial intelligence," Chief Executive Jensen Huang said in a news release.
He added, "AI will bring significant productivity gains to nearly every industry and help companies be more cost- and energy-efficient, while expanding revenue opportunities."
In the first quarter, Nvidia's data center sales jumped 427% year over year to $22.6 billion as enterprises snapped up graphics processors to run AI applications. Data center sales increased 23% from the fourth quarter.
Stock Split, Increased Dividend
Nvidia said its 10-for-1 stock split will be effective on June 7.
The company also raised its quarterly cash dividend by 150% to a penny a share on a post-split basis. On a pre-split basis, Nvidia's dividend increased from 4 cents a share to 10 cents.
On a conference call with analysts, Chief Financial Officer Colette Kress said large cloud computing service providers drove Nvidia's data center business last quarter. Those customers represented mid-40% of the company's data center revenue, she said.
Beyond cloud service providers, other companies buying Nvidia gear for generative AI include consumer internet companies, sovereign nations, automotive and health-care firms.
Demand for Nvidia's graphics processing units, or GPUs, is likely to exceed supply well into next year, Kress said.
Nvidia Stock: 'Next Wave Of Growth' Ahead
Strong demand for Nvidia's Hopper series processors for generative AI training and inference fueled the company's data center growth in the first quarter, Huang said.
"We are poised for our next wave of growth," Huang said. "The Blackwell platform is in full production and forms the foundation for trillion-parameter-scale generative AI. Spectrum-X opens a brand-new market for us to bring large-scale AI to Ethernet-only data centers. And Nvidia NIM is our new software offering that delivers enterprise-grade, optimized generative AI to run on CUDA everywhere — from the cloud to on-prem data centers and RTX AI PCs — through our expansive network of ecosystem partners."
Blackwell Revenue Accelerated
Nvidia moved up the timeline for realizing Blackwell series revenue. The company expects production shipments of Blackwell products in the current quarter and ramping in the third quarter, Huang said. And data centers using Blackwell processors will be up and running in the fourth quarter, he said.
"We will see a lot of Blackwell revenue this year," Huang said on the conference call.
Several Investor Worries
Investor concerns heading into Nvidia's report included the impact of U.S. trade restrictions with China and the company's ability to source enough components from its contract manufacturers to meet demand.
Analysts also are worried about a potential "air pocket" in sales of current Hopper series graphics processing units when Blackwell series GPUs become available later this year.
The major cloud service providers have been spending heavily on Nvidia GPUs to ramp up their capacity for generative artificial intelligence applications.
Nvidia Innovation On A 'Very Fast Rhythm'
On the conference call, an analyst asked what Nvidia is doing to fulfill its growing backlog of orders.
Huang stressed that the demand is strong in what he described as a major platform shift. "We're racing every single day. Customers are putting a lot of pressure on us to deliver," he said.
Another analyst asked what Nvidia is planning to offer after its current Blackwell processors.
Huang said: "Well, I can announce that after Blackwell, there's another chip. And we are on a one-year rhythm. You can also count on us having new networking technology on a very fast rhythm."
Nvidia Report Lifts Other AI Plays
Nvidia earnings and guidance gave a modest lift to some other AI plays. AI chipmakers Broadcom, Advanced Micro Devices, Taiwan Semiconductor Manufacturing and Astera Labs rose 1% to 3% in late trading.
ServiceNow rose slightly, while Dow giant Microsoft edged higher.
Vertiv and Powell Industries also advanced.
Super Micro Computer and Dell Computer, which both use Nvidia chips in their AI servers, rose 4.5% and 3.9%, respectively.
'Get The Popcorn Out'
To say Nvidia's fiscal Q1 report is being closely watched would be an understatement.
"When Nvidia holds its conference (call), you will be able to hear a pin drop on trading floors across Wall Street when (CEO) Jensen (Huang) gets the microphone," Wedbush Securities analyst Daniel Ives said Wednesday morning in a client note titled "Get the Popcorn Out."
He added, "The AI Revolution starts with Nvidia and in our view the AI party is just getting started with the popcorn getting ready."
Wedbush rates Nvidia stock as outperform with a price target of 1,000.
Nvidia Stock Weighs Heavily In Indexes
Nvidia's soaring stock price has given it a significant weight in key stock market indexes and exchange-traded funds. As of Monday, Nvidia accounted for 5.3% of the S&P 500, 6.5% of the Nasdaq 100 and 20.6% of the VanEck Semiconductor ETF, Mizuho Securities said.
Last year, Nvidia stock rocketed 239% to 495.22. Year to date through Wednesday's close, Nvidia stock is up 92%.
The next potential catalyst for Nvidia stock will be Huang's keynote speech June 2 at the Computex trade show. The chief executives of chipmakers AMD, Intel and Qualcomm also are speaking at the Taiwan show.
Futures: Nvidia Earnings Boom Again; Will That Offer Market Catalyst?
Nvidia On Several IBD Stock Lists
Nvidia stock is on five IBD stock lists including Leaderboard, IBD 50, Big Cap 20, Sector Leaders and Tech Leaders.
Further, Nvidia stock is one of the so-called Magnificent Seven stocks that had a huge run last year.
Nvidia stock closed Wednesday in buy range of a 922.20 cup-with-handle buy point.
IBD editors Ed Carson and Benjamin Pimentel contributed to this report.
Follow Patrick Seitz on X, formerly Twitter, at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.
