Nvidia: Breaking Above $1000 Post Earnings Announcement

Nvidia share price unlocked the $1000 milestone as the chip designer and AI behemoth reported revenues and profits skyrocketed by 262% (y/y) and 628% (y/y) respectively to $26B and $14.9B – this marked the company’s most profitable and highest sales quarter ever/. Non-GAAP earnings per diluted share (EPS) has up massively by 461% from a year ago.

Nvidia’s EPS. Source:Forbes

As expected, the company’s AI-intensive data center division serves as the major catalyst for Nvidia’s financial growth. The segment reported $22.6B in revenue, up 427% from the same period last year. As compared to the $1.1B brought in by the segment in 2020, the figure today has been increased by a whopping 20 times!

AI will bring significant productivity gains to nearly every industry and help companies be more cost- and energy-efficient, while expanding revenue opportunities” – Jensen Huang, Nvidia’s CEO.

Also, Nvidia announced a 10-for-1 forward stock split of Nvidia’s issued common stock. Each record holder of common stock as of market close on 6th June 2024, shall receive nine additional shares of common stock, to be distributed after market close on 7th June 2024. Trading is expected to commence on a split-adjusted basis at market open on 10th June 2024.

In fact, Nvidia has undergone a total of 6 stock splits since launching its IPO in 1999, most recently about three years ago for a 4-for-1 split. Theoretically, a stock split which resulted in lowered per-share value (without a change in the stock’s valuation) shall attract more individual investors, keeping the retail attraction flows. According to BofA Global Research, companies that announced stock splits have seen their shares rise an average of 25.4% over the next 12 months, versus an 11.9% rise for the S&P 500.

Technical Analysis:

#Nvidia, Weekly: Nvidia share price extended gains and formed a new ATH at $1062.68, following the company’s upbeat earnings result and its announcement to split stock. Overall trend remains bullish. According to FE projection, nearest resistance is seen at $1114, followed by $1335. On the other hand, previous ATH $973.68 and $950 serve as the nearest support zone.

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Larince Zhang

Market Analyst

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