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## Nvidia’s Strong Q1 Earnings Results and Stock Split Announcement

Nvidia (NVDA) released its first-quarter earnings report after the closing bell on Wednesday, beating expectations and surprising investors with a 10-for-1 stock split and an increased dividend. This move mirrors actions taken by other major tech companies, who are also ramping up their quarterly dividend payments to shareholders.

The company reported adjusted earnings per share (EPS) of $6.12 on revenue of $26 billion, marking a remarkable increase of 461% and 262%, respectively, compared to the same quarter last year. Analysts had forecasted adjusted EPS of $5.65 on revenue of $24.69 billion, according to Bloomberg data. In the previous year’s first quarter, Nvidia reported adjusted EPS of $1.09 on revenue of $7.19 billion.

For the current quarter, Nvidia anticipates revenue of $28 billion plus or minus 2%, exceeding the $26.6 billion estimated by analysts. Consequently, Nvidia’s stock price surged nearly 7% in pre-market trading, surpassing $1,000.

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## Expansion of Nvidia’s Data Center Segment and Future Outlook

Nvidia’s data center business exhibited remarkable growth, driven by rising demand for generative AI training and inference on the Hopper platform. CEO Jensen Huang highlighted the company’s success in expanding its market reach to consumer internet firms, enterprises, sovereign AI, automotive, and healthcare customers, leading to the creation of lucrative multibillion-dollar vertical markets.

Although Wall Street analysts have expressed reservations about Nvidia’s reliance on big cloud providers like Microsoft, Google, Amazon, and other tech giants for data center revenue, CFO Colette Kress disclosed that around 45% of the company’s data center revenue originates from large cloud providers. This segment recorded a staggering 427% increase year over year, amounting to $22.6 billion and representing 86% of Nvidia’s total revenue for the quarter.

However, revenue from China experienced a significant decline in the quarter due to shipment disruptions of Nvidia’s most powerful chips. Kress emphasized the competitive nature of the Chinese market, signaling ongoing challenges in the region.

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## Stock Split, Dividend Increase, and Market Speculation

Nvidia’s decision to implement a 10-for-1 stock split, effective June 7, and elevate its dividend, scheduled for payment on June 28, signifies a strategic move to enhance shareholder value. This development positions Nvidia as a potential candidate for inclusion in the Dow Jones Industrial Average alongside major tech players like Apple, Amazon, and Microsoft.

The stock split announcement propelled Nvidia’s stock price to nearly $980 per share in after-hours trading, indicating an expected post-split trading price of $98. Moreover, the company’s gaming segment reported revenue of $2.6 billion, reflecting a diversification strategy beyond its data center business.

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In conclusion, Nvidia’s robust performance in the first quarter, coupled with strategic initiatives such as the stock split and dividend increase, underscore the company’s resilience and adaptability in the rapidly evolving tech landscape. Investors and analysts can leverage AI legalese decoder to decode Nvidia’s financial disclosures, gain deeper insights into its business operations, and navigate market opportunities with confidence.

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