NVIDIA’s share price has breached the US$1,000 mark for the first time during pre-market trading this morning, with a hike of almost 7% from its closing price on Wednesday evening at US$949.50. This came after the tech giant reported its first quarter earnings, which exceeded expectations, as well as announced a 10-for-1 stock split and increased dividend of 150%.

Specifically, NVIDIA’s share briefly rose up to a high of US$1,016.80 after the company announced its latest earnings for the first quarter of 2024 (ended 28 April 2024). The price then dipped slightly, but still remained above the US$1,000 mark at US$1,007.00 (as of the time of writing).

In its report, NVIDIA shared that its revenue for the first quarter of 2024 came up to US$26 billion, up 18% from the previous quarter and 262% from a year ago. Adjusted earnings per share, meanwhile, stood at US$6.12.

These figures far exceed the expectations of analysts, who had forecasted an adjusted earnings per share of US$5.65 on a revenue of US24.69 billion. On top of that, NVIDIA also said that it expects a revenue of approximately US$28 billion in the current quarter, which – if it comes true – will beat the US$26.6 billion projected by analysts.

Understandably, market sentiments are buoyed by this positive news, thereby contributing to the latest hike in NVIDIA’s share price.

To further add to the excitement, NVIDIA also announced a 10-for-1 stock split of NVIDIA’s issued common stock, in a bid to make stock ownership more accessible to employees and investors. To explain, stock splits typically take place when a company wants to lower the trading price of their stocks, so that they become more affordable for investors to own. So as an example, if each NVIDIA stock is currently valued at US$949.50, each stock will soon be priced at US$94.95 post-split – making it easier to own a NVIDIA stock.

“Each record holder of common stock as of the close market on Thursday (6 June 2024) will receive nine additional shares of common stock, to be distributed after the close of market on Friday (7 June 2024),” NVIDIA said in a press release.

Furthermore, NVIDIA also said that it is increasing its quarterly cash dividend by 150% from US$0.04 per share to US$0.10 per share of common stock. This means that post-stock split, the increased dividend will be equivalent to US$0.01 per share, which will be paid on 28 June 2024 to all shareholders of record on 11 June 2024.

In announcing these updates, founder and chief executive officer of NVIDIA, Jensen Huang said that the company is now poised for its next wave of growth, especially as the world continues to embrace artificial intelligence.

“The next industrial revolution has begun – companies and countries are partnering with NVIDIA to shift the trillion-dollar traditional data centres to accelerated computing and build a new type of data centre – AI factories – to produce a new commodity: artificial intelligence. AI will bring significant productivity gains to nearly every industry and help companies be more cost- and energy-efficient, while expanding revenue opportunities,” said Huang.

To note, NVIDIA was previously best known as a maker of advanced graphics processing units (GPUs) for video games, but has recently gained a new reputation as a key hardware player in the artificial intelligence revolution.

(Sources: NVIDIA)

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