Nvidia’s (NASDAQ:NVDA) stock surged over 10% in today’s trading following its impressive Q1 results, showcasing yet another quarter of exceptional growth. Despite the stock hitting new record highs, there are compelling reasons to consider investing in this chip giant.
Nvidia reported Q1 EPS of $6.12, surpassing the Consensus of $5.49 per share by 11% and marking a remarkable 461% increase from $1.09 per share in the same quarter last year. The quarterly sales of $26 billion were 7% better than expected and surged 262% from $7.19 billion a year ago.
Here are five key reasons why now might be the ideal time to invest in Nvidia following its stellar Q1 report:
Strong Sales Guidance
Nvidia’s sales guidance for the second quarter anticipates a 107% increase to $28 billion, well above the current Consensus of $26.24 billion (Current Qtr below), indicating continued growth momentum.
Cash Reserves
Similar to Apple (NASDAQ:AAPL), Nvidia is becoming a cash cow, boasting over $30 billion in cash and equivalents. Its free cash flow skyrocketed over 400% in Q1 to $14.93 billion compared to $2.64 billion in the same quarter last year, showcasing robust business operations.
Stock Split
With NVDA trading over $1000 a share, Nvidia announced a 10-1 forward stock split effective June 10, aiming to make stock ownership more accessible. This announcement could potentially drive the stock price higher before the split.
Increased Dividend
Nvidia plans to increase its dividend by 150% from $0.04 to $0.10 per share, reflecting its commitment to returning value to shareholders. The increased dividend, equivalent to $0.01 per share post-split, will be paid on June 28 to shareholders on record by June 11.
Industry Leadership
Nvidia’s leadership in the AI sector continues to drive its growth. The upcoming Blackwell series of GPUs, expected to launch by the year-end, is anticipated to be the most advanced AI accelerative GPUs to date. Production is underway, with key customers including Amazon, Alphabet, Meta Platforms, Oracle, Tesla, and OpenAI.
In conclusion, Nvidia’s strong Q1 results and promising outlook make it a compelling investment opportunity. The company’s financial strength, strategic initiatives, and industry leadership position it for continued success in the future.
Featured Image – By NVIDIA Taiwan – https://www.flickr.com/photos/nvidia-taiwan/19548286388, CC BY 2.0, https://commons.wikimedia.org/w/index.php?curid=59135138
