Yesterday, advanced computer chip maker Nvidia unveiled record profits and its stock sharply increased. This revived the almost dormant buzz of artificial intelligence (AI) and led to rapture among tech-related companies. Nvidia has become so closely associated with AI because its GPUs are potent and practical at the kind of data crunching popular with AI applications. Let’s explore the Stock Market Today: Nvidia earnings report reveals record profits, boosting AI optimism and tech stocks. Discover the latest updates on Nvidia’s success.
Table of Contents
Introduction
Currently, NVIDIA’s GPUs are used in some of the highest-performing supercomputer AI in the world, and its solutions enable training systems such as OpenAI’s GPT, DeepMind’s AlphaFold, and complex recommendation systems like Netflix and TikTok. Nvidia GPUs were instrumental in everything from natural language processing to computer vision, from speech recognition to drug discovery, from sharp web search to.
The rise of the robots increases all the trends and new releases, and public consciousness like ChatGPT, DALL-E, and Claude from Anthropic only push the demand for Nvidia’s gadgets forward. Big tech companies, new-generation start-ups, large corporations, and research organizations across the world are involved in overdrive to put new systems in place to develop and deploy the next round of AI applications. When the high-profile Bourke said, “No doubt, the development of AI is a huge boost to the memory industry and one that will take years to play out.”
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However, there was little doubt in Stacy Rasgon’s mind that the analyst at Bernstein was right. As more and more AI workloads are getting shifted to Nvidia GPUs, more and more organizations are realizing that if they have to handle all the proliferating AI workloads, they have to purchase more and more Nvidia GPUs.
AI starts a new cycle of computing workloads, and there is a need for more performing processors. AI poses the need for a new computing cycle of workloads and faster processors. Share of Net Revenues from OEM and Other Channel Partners by Product Type:
Gaming GPUs have been the most significant product type for Nvidia in the past years, while crypto and AI have presented significant opportunities for the firm in years to come.
The analyst at Moor Insights, Pat Moorhead, rightly said that this is a revolution in computing. ‘It is a new genre of computing, a new operation, and a new use case. It has stimulated much growth for Nvidia. While investors embraced the AI opportunity for Nvidia a day before, taking its market capitalization past $2.7 trillion and ranking third just behind Microsoft and Apple. There lies a problem in the form of rivals in the silicon gaming area who are eyeing this space. AMD, Intel, Cerebras, and many more firms, along with several other AI chip start-ups, have set their eyes on this burgeoning market.
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Nvidia Earning
Nvidia’s earnings reports have primarily predicted the strength of the AI boom; the company’s most recent quarterly report indicates strong demand for its highly advanced AI chips. CEO Jensen Huang declared that Blackwell, their next-generation AI chip, would start generating revenue later in the year.
Premarket trading saw a 7% increase in Nvidia stock, and the company is expected to open at a record high today. For the first quarter of fiscal 2025, the firm reported adjusted earnings per share (EPS) of $6.12, exceeding the adjusted average expectation of $5.59. Revenue increased to $26.04 billion, surpassing the $24.65 billion projection as well. For the current quarter, Nvidia predicts sales of $28 billion, while Wall Street projects earnings per share of $5.95 on sales of $26.61 billion.
The most significant and crucial part of Nvidia’s business is its data center division, which generated $22.6 billion in revenue in the first quarter of this year, up 427% from the same period last year.
Nvidia announces a stock split and predicts quarterly revenue above estimates.
Analysts had predicted $24.65 billion for Nvidia’s fiscal second-quarter revenue, while Nvidia’s revenue was expected to reach $28 billion, a 262% YoY rise to $26.04 billion. Moreover, net income increased by 628% to $14.88 billion. With more than 80% of the AI chip market, Nvidia is the biggest supporter and benefactor of the rapid advancement of AI.
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Nvidia’s market share
The data center segment’s Q1 sales increased 427% to $22.6 billion, above projections of $21.320 billion. Nvidia’s customer Meta Platforms raised its capital expenditure estimate for 2024 by around $4 billion. In AI data centers, Nvidia’s superior speed and exclusive CUDA software framework make them hard to replace. Analysts do not anticipate that hyperscalers’ in-house AI processors, which they are building, will reduce Nvidia’s market share. With a first-quarter adjusted gross margin of 78.9% compared to projections of 77%, Nvidia anticipates a second-quarter adjusted gross margin of 75.5%, plus or minus 50 basis points. In Q1, the firm earned $6.12 per share, exceeding analysts’ expectations of $5.59.
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Nvidia Shares Surge after Earnings Beat
About $140 billion was added to Nvidia’s stock market valuation as the company reported a 5.9% increase in shares to $1,005, a record high. This year, the company’s stock has increased by 90%, and a closure at the after-hours price during the Wall Street trading session the next day would set a new record high. With effect from June 7, Nvidia will split its shares 10 for one and increase its quarterly dividend to 1c per share after the split of 150%. Indexes have risen to all-time highs this year, and the company’s earnings report may provide further impetus for the market’s surge.
In the wake of Nvidia’s announcements, shares of rival AI-related chip manufacturers AMD and Broadcom increased by almost 2% each. In their battle to rule AI computing, Google, Microsoft, Amazon, and other corporate giants have been vying for a small quantity of Nvidia’s top-tier chips. Nvidia Stock Rises Could Reach 100% in 2024 After Earnings Exceeded Expectations
Conclusion
Hence, shares of Nvidia increased when the company announced a 10-for-1 stock split and increased its dividend after quarterly sales and earnings surpassed analysts’ projections. In premarket trading, Nvidia’s stock (NVDA) increased by more than 7% to $1,006.89 per share. The stock might close above Tuesday’s all-time high and reach a gain of more than 100% by 2024 and it is essential to understand how this pattern holds.
