Nvidia, a leading chip design company, has experienced a remarkable 248% surge in its stock value over the past year, with its recent earnings report further spurring its growth. Following the Forbes prediction, on May 23, Nvidia exceeded expectations with a robust quarterly earnings report that pushed its stock price beyond ,000 per share.
The company, known for outsourcing its chip manufacturing, not only outperformed expectations and raised guidance but also announced a 10-for-1 stock split, repurchased billions of dollars worth of stock, and significantly enhanced its dividend. With the stock split anticipated to bring Nvidia’s stock price down to approximately 0 per share, experts believe the company will be able to maintain the momentum that has been driving its stock price higher for years to come.
There are three key reasons why Nvidia’s shares could potentially exceed ,000 post-split:
Nvidia’s Exceptional Performance and Promising Outlook
As Nvidia approached the anniversary of its impressive first quarter earnings report from 2023, the company faced a steep growth challenge. Nevertheless, Nvidia managed to surpass investors’ lofty expectations:
FY 2025 Q1 net sales forecast: .22 billion – Nvidia achieved .04 billion in revenue, surpassing the forecast by .78 billion.
FY 2025 Q1 gross margin forecast: 77.03% – Nvidia reported a gross margin of 78.4%, exceeding consensus by 1.37 percentage points.
FY 2025 Q1 adjusted earnings per share forecast: .50 – Nvidia reported an adjusted EPS of .12, surpassing the forecast by 62 cents per share.
FY 2025 Q2 revenue forecast: billion – Nvidia exceeded this projection with a remarkable 107.4% increase compared to the second quarter of 2023.
Nvidia’s Strategic Growth Investments
By choosing to reward investors with a 10-for-1 stock split, repurchasing .7 billion of company shares, and more than doubling its dividend per share from four cents to 10 cents based on the current share count, Nvidia has demonstrated its dedication to enhancing shareholder value.
CEO Jensen Huang’s Influential Leadership
The leadership of Nvidia’s CEO, Jensen Huang, has played a pivotal role in the company’s success. However, the potential departure of Huang without a suitable successor could pose a risk to Nvidia’s future growth.
In conclusion, Nvidia’s outstanding performance, strategic investments, and strong leadership have positioned the company for sustained growth. The upcoming stock split could also make Nvidia’s shares more accessible to a broader range of investors, potentially driving the stock price back above ,000 in the future.
