Nvidia ( NVDA ) reported first-quarter results after the bell Wednesday that beat expectations, while also announcing a 10-for-1 stock split and an increased dividend after some of its Big Tech peers handed out heftier quarterly payments to shareholders.
The company reported adjusted earnings per share (EPS) of $6.12 on revenue of $26 billion, up 461% and 262%, respectively, from a year ago.
Analysts had expected adjusted earnings per share of $5.65 on revenue of $24.69 billion, according to Bloomberg data. The company reported adjusted earnings per share of $1.09 on revenue of $7.19 billion in the same quarter last year.
For the current quarter, Nvidia expects revenue of $28 billion plus or minus 2%. That’s better than the $26.6 billion analysts expected.
Nvidia shares rose as much as 4% in extended trading on Wednesday.
“Our data center growth was fueled by strong and accelerating demand for generative AI training and inference on the Hopper platform,” Nvidia CEO Jensen Huang said in a statement. “In addition to cloud service providers, generative AI has expanded to consumer internet companies and enterprises. , sovereign AI, automotive and healthcare customers, creating multiple multi-billion dollar vertical markets.”
Wall Street analysts have previously raised concerns about the share of Nvidia’s data center revenue coming from hyperscalers like Microsoft (MSFT), Google (GOOG, GOOGL), Amazon (AMZN) and other Big Tech names. This is especially true as these companies roll out their own AI accelerator chips.
While non-hyperscaler use of Nvidia chips is growing, CFO Colette Kress said in her own commentary that major cloud providers accounted for about 45% of the company’s data center revenue.
Nvidia’s data center revenue rose 427% year over year to $22.6 billion, accounting for 86% of the company’s total revenue for the quarter. But Kress pointed out that sales from China fell significantly this quarter as the company was forced to halt shipments of its most powerful chips to the country. Moreover, she expects the market in the region to remain highly competitive in the future.
Nvidia’s gaming segment, which was previously its main business, generated revenue of $2.6 billion.
The company’s stock split – which will see shareholders receive 10 shares for every share of the company they currently own – will take effect on June 7, and the new dividend will be paid to shareholders from June 11 on June 28.
The stock split is likely to fuel speculation that Nvidia could be added to the price-weighted Dow Jones Industrial Average (^DJI), joining big tech peers like Apple (AAPL), Amazon and Microsoft. Nvidia stock was trading around $980 per share in after-hours trading on Wednesday, meaning the stock is expected to trade for $98 after the split.
Nvidia’s increased dividend also follows similar moves announced so far this year by companies like Meta (META) and Alphabet, both of which initiated quarterly dividends for the first time, and Apple, which increased its dividend earlier this month.
Email Daniel Howley at dhowley@yahoofinance.com. Follow him on Twitter at @DanielHowley.
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