On May 23rd, NVIDIA (NVDA) released its performance report for the first quarter of the fiscal year 2025, exceeding market expectations across all metrics. The first quarter saw revenues of $26 billion, marking a 262% increase from the same period last year, surpassing analysts' expectations of $24.65 billion. Data center revenue stood at $22.6 billion, a 427% year-over-year increase. Q1 net profit reached $14.81 billion, surging by 628%, translating to a net profit per share of $5.98, exceeding analysts' expectations of $5.59 per share. Concerns over gross margins, previously prevalent in the market, continued to dissipate as Q1 gross margin hit 78.4%, up from 76% the previous quarter and 64.6% the same period last year. NVIDIA anticipates second-quarter revenue to reach $28 billion (±2%), with adjusted gross margin expectations of 75.5% (±0.5%).
Following the earnings release, NVIDIA's stock surged over 7% in after-hours trading, breaking through the $1000 barrier and adding over $160 billion to its market value. As of the time of writing, the post-market gain slightly retraced to 6.03%, with the stock price at $1006.75. Analysts anticipate the stock to potentially hit new all-time highs in Thursday's trading session.
In the earnings statement, NVIDIA CEO Jensen Huang emphasized, "The next industrial revolution has begun." He pointed out that multiple countries and numerous enterprises globally are partnering with NVIDIA to transform traditional data centers, valued in the trillions of dollars, into accelerated computing platforms and to build "AI factories" for the production of revolutionary AI products. Huang further elaborated that AI technology is expected to bring significant productivity and revenue growth across industries while making significant strides in cost-effectiveness and energy efficiency.
Additionally, NVIDIA announced a stock split plan, implementing a {{0}}for-10 stock split starting June 10th. Each shareholder as of the June 6th closing date will receive an additional 9 shares for every 1 share held. This move aims to lower the stock price, making NVIDIA stock more accessible to employees and investors. The company also plans to increase dividends by 150% post-split, reaching $0.01 per share, payable to shareholders on record before June 11th.
During this reporting period, NVIDIA repurchased $7.7 billion worth of stocks and paid out $98 million in dividends. Over the past year, NVIDIA's stock price has skyrocketed from just over $100 to nearly $1000. Stock splits are often viewed as positive signals by the market regarding a company's prospects. Analysts note that NVIDIA's stock has surged 25-fold over the past five years, echoing stock splits by companies like Alphabet, Amazon, and Tesla in 2022.
