Nvidia stock set to hit a new record high

The company’s good results on Wednesday suggest that demand for the AI chips Nvidia creates remains healthy. Investors now use Nvidia’s quarterly earnings report to determine how strong the AI boom has captured the attention of global markets Nvidia’s CEO Jensen Huang stated that the business would see revenue from its next-generation AI processor, dubbed Blackwell, later this year.

In extended trading, the stock increased by 7%.. According to the post-market movement, the shares are expected to hit a new high on Thursday. Nvidia announced a 10-for-1 stock split and an enhanced dividend on Wednesday. In extended trading on Wednesday, the price of Nvidia’s stock crossed $1,000 for the first time following the chipmaker’s release of fiscal first-quarter earnings that were above analyst projections. 

Nobody has increased their equity worth from $1 trillion to $2 trillion more quickly than Nvidia. In fewer than nine months, the chip designer doubled its market capitalization. As generative artificial intelligence grows, there is still a demand for more Nvidia chips than is available. Reaching the $3 trillion mark, however, is proving more challenging. 

Since businesses like Google, Microsoft, Meta, Amazon, and OpenAI have been purchasing Nvidia’s graphics processing units—expensive and sophisticated chips needed for creating and implementing artificial intelligence applications—for billions of dollars, the company’s sales have increased dramatically over the last year.  

The portion of Nvidia’s Data Center income that comes from hyperscalers like Microsoft (MSFT), Google (GOOG, GOOGL), Amazon (AMZN), and other Big Tech firms has previously alarmed Wall Street analysts. This is particularly true as those businesses release processors with built-in AI accelerators. 

Large cloud providers contributed about 45% of the company’s data center revenue, according to CFO Colette Kress’ statement, even though the use of Nvidia processors by non-hyper scalers is increasing. 

Nvidia stated that it anticipated $28 billion in revenue for the current quarter. Based on $26.61 billion in sales, Wall Street was expecting earnings per share of $5.95, according to LSEG.  

In comparison to the same period last year, when it earned $2.04 billion, or 82 cents per share, the chipmaker announced net income for the quarter that concluded on April 28 of $14.88 billion, or $5.98 per share.  

Effective June 7, the company’s stock split will give stockholders 10 shares for each share they own. Additionally, as of June 11, shareholders will receive a new dividend, which will be paid on June 28.