Nvidia Wows With Earnings, Stock Split and Dividend Hike
Nvidia gave investors plenty to cheer about in its first-quarter earnings release and its stock soared as a result. Here's what you need to know.
Nvidia (NVDA) stock breached the $1,000 per-share mark for the first time ever Thursday after the chipmaker and artificial intelligence (AI) bellwether beat expectations for its fiscal 2025 first quarter. The company also announced a 10-for-1 stock split and more than doubled its dividend.
In the three months ended April 28, Nvidia's saw its revenue climb to $26 billion from $7.2 billion in the year-ago period, while earnings per share jumped to $6.12 from $1.09. The impressive results were helped by strong data center revenue, which surged to $22.6 billion from $4.3 billion one year ago.
"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," Nvidia CEO Jensen Huang said in a statement. "AI will bring significant productivity gains to nearly every industry and help companies be more cost- and energy-efficient, while expanding revenue opportunities."
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The results handily beat Wall Street's expectations for earnings of $5.57 per share on $24.6 billion in revenue.
"Death, taxes, and NVDA beats on earnings," says Ryan Detrick, chief market strategist at Carson Group. "Even in the face of huge expectations, the company once again stepped up and delivered. The always important data center revenue was strong, while future revenue was also impressive. Bottom line, the bar was high and cleared it once again."
As for the shareholder friendly initiatives announced in Nvidia's quarterly report, the company said it decided to split its common stock in order to "make stock ownership more accessible to employees and investors." Based on NVDA's current price of roughly $1,037, shares will be trading closer to around $103.70 once the split goes into effect after the June 7 close.
Additionally, Nvidia raised its quarterly dividend 150% to 1 cent per share post-split.
Is Nvidia stock a buy, sell or hold?
Given the impressive long-term returns Nvidia has generated, it's unsurprising that Wall Street considers it one of the best stocks to buy. According to S&P Global Market Intelligence, the consensus analyst target price for NVDA stock is $1,152.57, representing implied upside of about 11% to current levels. Additionally, the consensus recommendation is a Strong Buy.
Financial service firm Wedbush is one of the most bullish outfits on Wall Street with a Buy rating and $1,200 price target on Nvidia stock.
"Jensen Huang's suggestion that not only is demand for H200 and Blackwell well ahead of supply, but also that NVDA 'expect(s) demand may exceed supply well into next year,' parallels our view that NVDA will continue to outperform expectations," says Wedbush analyst Matt Bryson, adding that he doesn't expect headwinds to appear until mid-2025 at the earliest.
With Nvidia hitting the "'fast-forward' button," Bryson sees "no reason to moderate our enthusiasm around NVDA and we are reiterating our Outperform [Buy] rating on the stock."
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