Nvidia announced its first fiscal-quarter earnings on Wednesday, surpassing expectations for both revenue and earnings, and provided an optimistic forecast for the current quarter. The company also revealed plans to split its stock 10 to 1, a move designed to make shares more accessible to a wider range of investors.

Financial Highlights

- Earnings Per Share (EPS): Nvidia reported an adjusted EPS of $6.12, exceeding the LSEG consensus estimate of $5.59.

- Revenue: The company achieved revenue of $26.04 billion, surpassing the anticipated $24.65 billion.

- Forecast: Nvidia projects sales of $28 billion for the current quarter, outpacing Wall Street’s expectation of $26.61 billion.

- Net Income: The net income for the quarter skyrocketed to $14.88 billion, or $5.98 per share, compared to $2.04 billion, or 82 cents per share, in the same quarter last year.

AI Demand Fuels Growth

Nvidia’s impressive results highlight the escalating demand for AI chips, which has significantly bolstered its sales. Following the earnings report, the stock saw a 2% rise in extended trading. Major tech companies like Google, Microsoft, Meta, Amazon, and OpenAI are heavily investing in Nvidia’s GPUs, essential for developing and deploying AI applications.

Data Center Revenue Surge

- Data Center: Nvidia’s data center segment, including AI chips, experienced a 427% year-over-year revenue increase, reaching $22.6 billion. This area has become the company’s most significant revenue driver.

- H100 GPU: The rise in data center revenue is attributed to the shipments of Nvidia’s “Hopper” graphics processors, particularly the H100 GPU.

- Cloud Providers: CFO Colette Kress noted that large cloud providers significantly contributed to this growth, accounting for mid-40% of the data center revenue.

Networking and Gaming Growth

- Networking: Nvidia reported $3.2 billion in networking revenue, primarily from its Infiniband products, marking a threefold increase from the previous year. This growth emphasizes the importance of networking components as companies build extensive clusters of interconnected chips.

- Gaming: Nvidia’s gaming revenue, traditionally its core business, increased by 18% to $2.65 billion, driven by robust demand.

Additional Segments

- Professional Visualization: The professional visualization segment reported $427 million in revenue.

- Automotive: Nvidia’s automotive segment generated $329 million in revenue.

Share Buybacks and Dividend Increase

Nvidia repurchased $7.7 billion worth of shares and paid $98 million in dividends during the quarter. The company also announced an increase in its quarterly cash dividend from 4 cents per share to 10 cents on a pre-split basis. Post-split, the dividend will be 1 cent per share.

Summary

Nvidia’s outstanding performance and strategic stock split underscore its dominant position in the AI chip market and its positive outlook for continued growth. By surpassing expectations in earnings, revenue, and forecasts, Nvidia reinforces its role as a key player in the tech industry. The significant increases in net income and segment revenues reflect the growing demand for Nvidia's products across various sectors, from gaming to professional visualization and automotive solutions.