Nvidia Share Price set to smash expectations with latest earnings announcement?
- Record quarterly sales of $26.0 billion, up 262% from a year earlier and up 18% from Q4
- Quarterly cash dividend increased by 150%, post-split, to $0.01 per share.
- Revenue from data centers reached a record $22.6 billion in Q4, up 23% from Q4 and 427% from the same period last year.
- Forward stock split of ten to one, operative June 7, 2024
The first quarter of 2024 ending on April 28, 2024, with $26.0 billion in sales for NVIDIA (NASDAQ: NVDA), up 26% from the prior quarter and 18% from the same period the previous year.
GAAP earnings per diluted share for the quarter were $5.98, up 629% from a year ago and up 21% from the prior quarter. $6.12 was the non-GAAP earnings per diluted share, up 19% from the prior quarter and 461% from the same period last year.
“A new kind of data center, called AI factories, is being built to produce a new commodity: artificial intelligence. Companies and nations are partnering with NVIDIA to shift the trillion-dollar traditional data centers to accelerated computing,” stated Jensen Huang, founder and CEO of NVIDIA. “The next industrial revolution has begun.” AI will increase productivity significantly across almost all industries, improve cost and energy efficiency for businesses, and open up new revenue streams.
The robust and increasing demand for generative AI training and inference on the Hopper platform drove the expansion of our data center. In addition to cloud service providers, generative AI has also reached enterprise, sovereign AI, automotive, and healthcare clients, resulting in the creation of numerous multibillion-dollar vertical industries.
“We’re ready for the next phase of expansion. With the Blackwell platform currently in full production, trillion-parameter-scale generative artificial intelligence is built upon. Our ability to introduce large-scale AI to Ethernet-only data centers is made possible by Spectrum-X. Additionally, with our wide network of ecosystem partners, NVIDIA NIM is our new software product that provides enterprise-grade, optimized generative AI to run on CUDA everywhere, including the cloud, on-premise data centers, and RTX AI PCs.
In order to increase employee and investor access to stock ownership, NVIDIA recently announced a ten-for-one forward stock split of its issued common stock. The Restated Certificate of Incorporation of NVIDIA will be amended to implement the split, leading to a corresponding increase in the number of authorized common stock shares. Nine extra shares of common stock will be distributed to each record holder of common stock as of Thursday, June 6, 2024, at the end of the market. The distribution will take place on Friday, June 7, 2024, following the close of the market. On Monday, June 10, 2024, at market open, split-adjusted trading is anticipated to begin.
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Q1 Fiscal 2025 Summary
| GAAP | |||||
| ($ in millions, except earnings per share) | Q1 FY25 | Q4 FY24 | Q1 FY24 | Q/Q | Y/Y |
| Revenue | $26,044 | $22,103 | $7,192 | Up 18% | Up 262% |
| Gross margin | 78.4% | 76.0% | 64.6% | Up 2.4 pts | Up 13.8 pts |
| Operating expenses | $3,497 | $3,176 | $2,508 | Up 10% | Up 39% |
| Operating income | $16,909 | $13,615 | $2,140 | Up 24% | Up 690% |
| Net income | $14,881 | $12,285 | $2,043 | Up 21% | Up 628% |
| Diluted earnings per share | $5.98 | $4.93 | $0.82 | Up 21% | Up 629% |
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| Non-GAAP | |||||
| ($ in millions, except earnings per share) | Q1 FY25 | Q4 FY24 | Q1 FY24 | Q/Q | Y/Y |
| Revenue | $26,044 | $22,103 | $7,192 | Up 18% | Up 262% |
| Gross margin | 78.9% | 76.7% | 66.8% | Up 2.2 pts | Up 12.1 pts |
| Operating expenses | $2,501 | $2,210 | $1,750 | Up 13% | Up 43% |
| Operating income | $18,059 | $14,749 | $3,052 | Up 22% | Up 492% |
| Net income | $15,238 | $12,839 | $2,713 | Up 19% | Up 462% |
| Diluted earnings per share | $6.12 | $5.16 | $1.09 | Up 19% | Up 461% |
Outlook
Nvidia Share Price outlook for the second quarter of fiscal 2025 is as follows:
- Revenue is expected to be $28.0 billion, plus or minus 2%.
- GAAP and non-GAAP gross margins are expected to be 74.8% and 75.5%, respectively, plus or minus 50 basis points. For the full year, gross margins are expected to be in the mid-70% range.
- GAAP and non-GAAP operating expenses are expected to be approximately $4.0 billion and $2.8 billion, respectively. Full-year operating expenses are expected to grow in the low-40% range.
- GAAP and non-GAAP other income and expense are expected to be an income of approximately $300 million, excluding gains and losses from non-affiliated investments.
- GAAP and non-GAAP tax rates are expected to be 17%, plus or minus 1%, excluding any discrete items.
“Nvidia’s quarterly results on Wednesday could set the tone for U.S. stock markets and reverberate through companies exposed to the burgeoning artificial intelligence field. The semiconductor company at the center of the excitement over AI’s business potential is expected to report a massive jump in revenue and profit for its fiscal first quarter,” says Zacks Research Director, Sheraz Mian.
Nvidia is expected to report robust earnings once again, fueled by its dominance in the AI sector and strong demand for its GPUs.
“Hotly anticipated earnings announcement from semiconductor behemoth Nvidia. The options market is anticipating a sharp move in the bellwether name after the company releases its earnings results, which may embolden equity bulls or awaken the bears from hibernation,” says José Torres, Senior Economist at Interactive Brokers.
However, the road ahead for NVDA stock may not be as fruitful to investors as in the past, is what Nigel Green, CEO, deVere Group feels, “However, the anticipated share price jump, which we expect to be around 8%, is likely to be less dramatic than previous quarters. This tempered expectation reflects a market that has already priced in much of Nvidia’s rapid growth and stellar performance.”
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