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Nvidia stock is getting more affordable!

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Nvidia ( NASDAQ:NVDA ) stock rose nearly 6% in post-market trading on Wednesday (May 22) after the AI-enabled chip company released its results for the first quarter. Clearly, the results were good. The company also announced a 10-for-1 stock split, meaning shares will become more accessible.

Let’s take a closer look.

Nvidia benefits from the AI ​​frenzy.

US stocks, and tech shares in particular, have performed very well over the past 12 months. AI is a buzzword and investors are clamoring for more exposure to the fast-growing sector. Nvidia, with its AI-enabled chips, is central to this.

It has a track record of beating market expectations. Wednesday’s report marked its ninth consecutive earnings beat. Analysts were bullish leading up to Wednesday’s results, with 35 positive revisions in the 90 days to just two negative revisions.

Yet the market was notably quiet on Wednesday as investors held off to see what Jensen Huang’s company had in store. Nvidia’s results are undoubtedly the most important event of the earnings season.

AI is on the rise.

Nvidia’s results tell us that AI is still on the rise. The company’s non-GAAP earnings per share (EPS) of $6.12 beat analysts’ estimates by $0.54. Revenue of $26bn beat estimates by $1.45bn. Key to this was revenue from the company’s data center business. Data center revenue came in at $22.6 billion, up 23% from Q4 2024 and up 427% from a year ago.

Data centers are the cornerstone of the AI ​​revolution. Graphic processing units (GPUs)—originally developed by Nvidia for the gaming sector—consume 10-15 times more power than traditional central processing units (CPUs). Satisfying these power-hungry GPUs requires massive upgrades to data center infrastructure.

However, there are always risks, of course, and competition is one of them. Big tech companies like Meta Designing your own chips. It is also the case that China is investing heavily in the semiconductor space. It is not inconceivable that Chinese companies could catch on. But for the foreseeable future, at least, Nvidia remains the dominant force.

key points

So what else did we learn from the report?

  1. AI is not slowing down. Data center segment revenue rose to $22.6bn from $4.2bn in Q1. Growth was strong in every quarter.
  2. Nvidia will become more affordable. In the earnings call, Nvidia announced that on June 7, it will issue a 10-for-1 stock split. A stock will no longer cost $1,000, but $100, making it more accessible to retail investors.
  3. It is innovative at speed. Huang said the company is working on it.A rhythm of a year“- it will produce new AI chips every year instead of every two years – and that after Blackwell – its latest chip architecture – there will be other Blackwells.

The bottom line

Many investors will look at a stock that is up 2,500% over five years and be understandably wary. However, I don’t see it as a problem. It trades in high-end competition. FTSE 100 Stocks but offer more growth than anything we’ve seen in UK indices. Revenue is expected to grow at an average of 35% annually over the next three to five years.

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