Nvidia rises on robust revenue forecasts, stock split plans
Date
5/23/2024 5:39:55 AM
(MENAFN) Nvidia, a leading manufacturer of chips utilized in artificial intelligence (AI) technologies, witnessed a significant surge in its stock price, climbing approximately 6 percent in after-hours trading. This upward momentum was spurred by the company's announcement of second-quarter revenue expectations that exceeded analyst estimates, driven by robust demand for its chips from companies embracing AI technologies. Additionally, Nvidia unveiled plans to initiate a stock split.
Anticipating second-quarter revenues to reach USD28 billion, plus or minus two percent, Nvidia's projections surpassed analysts' average revenue expectations of USD26.66 billion, according to data sourced from the London Stock Exchange Group. In response to these optimistic forecasts, Nvidia's stock price surged to USD1,007 in after-hours trading, breaching the significant psychological threshold of USD1,000 and augmenting the company's market value by approximately USD140 billion to a staggering USD2.336 trillion. Notably, Nvidia's shares have already recorded remarkable gains of over 90 percent since the beginning of the year.
Based in Santa Clara, California, Nvidia revealed plans to implement a ten-for-one stock split, effective June 7, aimed at enhancing accessibility to its shares for investors. Concurrently, the company announced a substantial increase in its quarterly dividend by 150 percent to one cent per share, post-split.
Following Nvidia's robust performance and optimistic outlook, shares of competing AI-related chipmakers, such as Advanced Micro Devices (AMD) and Broadcom, also experienced gains of approximately 2 percent each.
Nvidia's impressive financial results for the first quarter underscored its strong performance, with revenues soaring by 262 percent year-on-year to USD26.04 billion, surpassing estimates of USD24.65 billion. Moreover, the company reported a remarkable 628 percent increase in net income, reaching USD14.88 billion.
The intense competition among technology behemoths, including Alphabet (owner of Google), Microsoft, and Amazon, for access to advanced Nvidia chips underscores the pivotal role played by Nvidia's offerings in driving the evolution of AI computing. Nvidia's stellar performance and strategic initiatives position it as a key player in shaping the future of AI-driven technologies and continue to fuel investor enthusiasm in the company's growth prospects.
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