Nvidia, a major chipmaker, saw its shares go over $1,000 for the first time after announcing great financial results for the first quarter. These results were better than what experts expected. The company's earnings are a key sign of the growing interest in artificial intelligence (AI). The strong performance shows that there is still a high demand for Nvidia's AI chips. CEO Jensen Huang said Nvidia plans to make money from its new AI chip, Blackwell, later this year.
After these announcements, Nvidia's stock price went up by 7% in after-hours trading. The company also said it was doing a 10-to-1 stock split, which means the shares might go even higher the next day.
For the quarter, Nvidia reported earnings of $6.12 per share, which was better than the expected $5.59, and a revenue of $26.04 billion, higher than the expected $24.65 billion. The company expects to make $28 billion in sales for the current quarter, more than what Wall Street predicted at $26.61 billion.
Nvidia's net income for the quarter was $14.88 billion, a big jump from $2.04 billion in the same period last year.
Over the past year, Nvidia's sales have increased a lot because big companies like Google, Microsoft, Meta, Amazon, and OpenAI have bought billions of dollars worth of Nvidia's graphics processing units (GPUs). These advanced chips are important for creating and using AI applications.
The most important part of Nvidia's business is its data center sales, which include AI chips and other parts needed to run large AI servers. This part of the business saw a 427% increase in revenue from last year, reaching $22.6 billion. This increase was due to the sales of Nvidia's Hopper graphics processors, especially the H100 GPU. A big moment was when Meta announced they used 24,000 H100 GPUs for their new large language model, Lama 3.
Nvidia's CEO, Huang, is optimistic about the future, especially with the upcoming Blackwell AI GPU, which is expected to help the company grow and be available in data centers by the fourth quarter.
Nvidia also had strong sales in its networking division, which is important for connecting large groups of chips, with $3.2 billion in revenue from products like InfiniBand—more than three times the sales from the previous year.
Nvidia was originally known for making hardware for 3D gaming, and its gaming revenue went up by 18% to $2.65 billion due to strong demand. The company also sells chips for cars and advanced graphics workstations, but these are smaller compared to its data center business.
During the quarter, Nvidia bought back $7.7 billion of its shares and paid $98 million in dividends. The company announced it was increasing its quarterly cash dividend from 4 cents to 10 cents per share before the stock split. After the split, the dividend will be a penny per share.
Key points
Nvidia announced its first-quarter earnings on Wednesday, and the results were better than expected for both sales and earnings.
Because of these strong results, Nvidia's stock price went up and crossed $1,000 per share in after-hours trading.
The good results indicate that there is still a strong demand for the AI chips Nvidia produces.
Nvidia's CEO, Jensen Huang, mentioned that the company expects to start earning money from its new AI chip, named Blackwell, later this year.
FAQs
Q1. What happened with Nvidia's first-quarter earnings?
Nvidia announced its earnings for the first quarter, and they were better than what experts had predicted in terms of sales and earnings.
Q2. How did Nvidia's stock react to the earnings report?
After the earnings were announced, Nvidia's stock price increased and went over $1,000 per share in after-hours trading.
Q3. Why are Nvidia's results considered strong?
The results are strong because they show that there is a high demand for the AI chips that Nvidia makes.
Q4. What does the rise in Nvidia's share price indicate?
The increase in Nvidia's stock price indicates that investors are confident in the company's performance and prospects, especially in the AI sector.
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