(US) Nvidia’s Earnings Recap
(US) Nvidia’s Earnings Recap

(US) Nvidia’s Earnings Recap

Thu, May 23, 2024 9:02 AM

By Kenny Yee, Head of Research, Rakuten Trade & Vincent Lau, Head of Equity Research, Rakuten Trade

Summary  

  • Nvidia’s Q1 earnings topped expectations
  • Announced a 10-for-1 stock split in which shareholders will receive 10 shares for every one share of the company they currently own — will be effective June 7.
  • Announced increased dividend, and its new dividend will be paid June 28 to shareholders as of June 11.  The new quarterly dividend will be 10 cents a share, up from 4 cents a share before. After the split, the dividend will be a penny a share.
  • Earnings per share (EPS) of USD6.12 +461% from 2023 higher than consensus forecast USD5.65
  • Revenue of USD26 billion +262% from 2023.
  • Growth was fueled by accelerating demand for generative AI training and inference on the Hopper platform. Beyond cloud service providers, generative AI has expanded to consumer internet companies, and enterprise, sovereign AI, automotive and healthcare customers, creating multiple multibillion-dollar vertical markets.
  •  The company's stock split—The stock split will likely fuel speculation that Nvidia could be added to the price-weighted Dow Jones Industrial Average (DJI), joining Big Tech peers like Apple (AAPL), Amazon (AMZN), and Microsoft (MSFT). Nvidia stock was trading near USD980 per share in after-hours trading on Wednesday, meaning the stock would be expected to trade at USD98 after the split.
  •  Nvidia intends to buy back USD7.7 billion worth of its shares and pay USD98 million in dividends during the quarter. 
  • Nvidia's contract chipmaker, Taiwan Semiconductor Manufacturing (TSM), has focused on enhancing its advanced packaging capacity, a key supply-chain constraint for processors. TSM aims to more than double its advanced packaging capacity this year. 
  • Moving forward, Nvidia has provided guidance for the fiscal second quarter, anticipating revenue of USD28 billion, plus or minus 2%. This surpasses analysts' average revenue expectation of USD26.66 billion. 
  • Nvidia also projects a Q2 adjusted gross margin of 75.5%, plus or minus 50 basis points. Analysts on average forecast gross margin to be 75.8%.
  • Nvidia's share price increased by +91.73% year-to-date, and the last traded price was USD949.50
  • Bloomberg consensus rating has 60 Buys and 7 Holds with a 12-month target price of USD1,060.01

 Sources: Bloomberg, CBBC, Reuters

 

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Kenny Yee has over three decades of hands-on experience in the industry and holds the esteemed position of being a founding member of Rakuten Trade. Currently serving as the Head of Research at Rakuten Trade, he dedicates his expertise to delving into the realm of small and mid-cap companies listed on Bursa Malaysia. His journey in the financial sector as an analyst began in 1989 before assuming a pivotal role as the Head of Research at Nikko Securities in 1993. He joined OSK Investment Bank in 2005, where he assumed leadership of their research division. Notably, during his tenure at OSK, he was instrumental in championing the recognition of "OSK’s 100 Hidden Jewels," a collection primarily comprised of small-cap companies (the first of such endeavor), which subsequently garnered substantial attention from both institutional and retail investors alike. Kenny has an Honors degree from Keele University (Stoke-On-Trent, England), where he pursued a joint degree in economics and law. 

 

Vincent Lau, a licensed research analyst by the Securities Commission Malaysia, who spearheaded the formation of Rakuten Trade Sdn Bhd's digital research team for retail investors. Presently, he serves as the Head of Equity Sales, leading digital news-driven trading ideas. With nearly 20 years in corporate finance, Lau has held prominent roles at Kenanga Investment Bank, RHB Islamic Bank, Standard Chartered Bank, and Hong Leong Islamic Bank. Lau is a graduate of Flinders University, holding a Bachelor of Commerce, and the University of Malaya, where he earned an MBA.  

 

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