Nvidia's Impressive Earnings and Stock Split Announcement

Nvidia, often referred to as the most crucial stock globally by Goldman, has recently reported its earnings. The company, which accounts for 5% of the S&P, is considered a market leader in Artificial Intelligence (AI).

Investor Interest in Nvidia's Earnings

The interest in Nvidia's earnings report was so high that investors were keen to analyze every possible clue about the company's performance. Some even went as far as to scrutinize the body language of Jensen Huang, Nvidia's CEO, during an interview on Bloomberg Television. The consensus was that Nvidia is looking to expand its sales beyond just cloud providers and is targeting enterprise and government markets.

Outstanding Q1 Results

Nvidia's Q1 results were impressive: - Revenue was reported at $26.04 billion, a significant increase from $7.19 billion year over year (y/y) and well above the estimated $24.69 billion. - Data center revenue came in at $22.6 billion, compared to $4.28 billion y/y, surpassing estimates of $21.13 billion. - Professional Visualization revenue was $427 million, up 45% y/y, slightly below the estimated $479.1 million. - Automotive revenue was $329 million, up 11% y/y, beating estimates of $292.4 million. - Adjusted gross margin was 78.9% compared to 66.8% y/y, exceeding estimates of 77%. - R&D expenses were $2.72 billion, up 45% y/y, in line with the estimated $2.73 billion. - Adjusted operating expenses were $2.50 billion, up 43% y/y, in line with estimates of $2.51 billion. - Adjusted operating income was $18.06 billion compared to $3.05 billion y/y, crushing estimates of $16.46 billion. - Free cash flow was $14.94 billion compared to $2.64 billion y/y, above the estimated $12.29 billion.

Q2 and Full Year Guidance

For Q2, Nvidia expects revenue to be around $28.0 billion, which is in line with the earlier prediction of $28 billion being the magic number that would determine the stock's performance. The company's track record suggests that the actual figure will likely be on the higher end, possibly close to $29 billion. Other guidance for Q2 and the full year includes: - GAAP and non-GAAP gross margins are expected to be 74.8% and 75.5% respectively, with full-year gross margins expected to be in the mid-70% range. - GAAP and non-GAAP operating expenses are expected to be approximately $4.0 billion and $2.8 billion, respectively, with full-year operating expenses expected to grow in the low-40% range. - GAAP and non-GAAP other income and expense are expected to be an income of approximately $300 million. - GAAP and non-GAAP tax rates are expected to be 17%, plus or minus 1%.

Nvidia's Key Achievements

Nvidia's key achievements in the first quarter include: - Record revenue of $22.6 billion, up 23% from the previous quarter and up 427% from a year ago. - The unveiling of the NVIDIA Blackwell platform and the Blackwell-powered DGX SuperPOD™ for generative AI supercomputing. - The launch of NVIDIA AI Enterprise 5.0 with NVIDIA NIM inference microservices to speed enterprise app development. - The announcement that TSMC and Synopsys are going into production with NVIDIA cuLitho to accelerate computational lithography. - The announcement that nine new supercomputers worldwide are using Grace Hopper Superchips to ignite a new era of AI supercomputing.

10 for 1 Stock Split

In addition to the impressive earnings, Nvidia also announced a 10 for 1 stock split. This move is expected to attract more retail investors to the stock, which will be perceived as more affordable.

Nvidia's Stock Performance

Following the announcement, Nvidia's stock surged in after-hours trading, increasing by about 4% and trading in the mid $970s. The stock nearly reached a new all-time high of $1,000.

What's Next for Nvidia?

Given Nvidia's impressive performance and the upcoming stock split, it's only a matter of time before the company's stock price hits four digits. What are your thoughts on Nvidia's performance and future prospects? Feel free to share this article with your friends and discuss it. Don't forget to sign up for the Daily Briefing, which is delivered every day at 6pm.