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5 Reasons to Buy Nvidia's (NVDA) Stock After Strong Q1 Results
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Nvidia (NVDA - Free Report) shares are up over +10% in today’s trading session after reporting its Q1 results Wednesday evening and posting another quarter of exponential growth. Furthermore, there is still an abundance of reasons to buy the chip giant's stock.
With Nvidia’s stock hitting fresh record highs, the leader in AI accelerating GPUs posted Q1 EPS of $6.12 which beat the Zacks Consensus of $5.49 per share by 11% and skyrocketed 461% from $1.09 a share in the prior-year quarter. Quarterly sales of $26 billion came in 7% better than expected and leaped 262% from $7.19 billion a year ago.
Better still, here are five shareholder viewpoints as to why now is an ideal time to invest in Nvidia following its exhilarating Q1 report.
Image Source: Zacks Investment Research
Nvidia’s Guidance Continues to Impress…
Fueling the post-earnings spike in Nvidia’s stock was the company’s sales guidance which could keep the rally going in the coming weeks. To that point, Nvidia expects sales for the second quarter to increase 107% to $28 billion, guiding impressively above the current Zacks Consensus of $26.24 billion (Current Qtr below) or 94% growth.
Image Source: Zacks Investment Research
Nvidia is Becoming a Cash Cow
Starting to mirror Apple’s (AAPL - Free Report) impressive balance sheet, Nvidia is becoming a cash cow with the chip giant now having over $30 billion in cash and equivalents. Further illustrating the strength of Nvidia’s business operations is that its free cash flow climbed over 400% during Q1 at $14.93 billion compared to $2.64 billion in the comparative quarter. On a sequential basis, Nvidia’s free cash flow spiked 33% from $11.21 billion at the end of Q4.
Image Source: Zacks Investment Research
Stock Split
With NVDA now trading over $1000 a share, Nvidia announced it will be doing a 10-1 forward stock split that will take effect on Monday, June 10. Of course, the split is aimed at making stock ownership more affordable to employees and investors but this is another reason to believe NVDA could run higher beforehand.
Increased Dividend
One thing Nvidia will be doing with its growing cash pile is increasing its dividend by 150% from $0.04 a share to $0.10 per share. Notably, Nvidia returned $7.8 billion to shareholders during Q1 in the form of share repurchases and cash dividends.The increased dividend will be equivalent to $0.01 per share on a post-split basis and will be paid on Friday, June 28 payable to shareholders on record by Tuesday, June 11.
Industry Leadership
Lastly, being the leader of the AI boom has bolstered Nvidia’s growth and remains the most obvious reason to own its stock. Nvidia’s leadership among chipmakers will likely continue with its highly anticipated Blackwell series of GPUs.
Still expected to launch by the end of the year and thought to be the most advanced AI accelerative GPUs to date, Nvidia stated the production for the Blackwell series is in full swing with an impressive list of time-to-market customers including Amazon (AMZN - Free Report) , Alphabet (GOOGL - Free Report) , Meta Platforms (META - Free Report) , Oracle, (ORCL - Free Report) , Tesla (TSLA - Free Report) , and OpenAI among others.
Bottom Line
There was a lot to like about Nvidia’s Q1 results and for now, NVDA continues to sport a Zacks Rank #1 (Strong Buy) attributed to these compelling shareholder viewpoints and the fact that earnings estimate revisions have continued to rise.
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5 Reasons to Buy Nvidia's (NVDA) Stock After Strong Q1 Results
Nvidia (NVDA - Free Report) shares are up over +10% in today’s trading session after reporting its Q1 results Wednesday evening and posting another quarter of exponential growth. Furthermore, there is still an abundance of reasons to buy the chip giant's stock.
With Nvidia’s stock hitting fresh record highs, the leader in AI accelerating GPUs posted Q1 EPS of $6.12 which beat the Zacks Consensus of $5.49 per share by 11% and skyrocketed 461% from $1.09 a share in the prior-year quarter. Quarterly sales of $26 billion came in 7% better than expected and leaped 262% from $7.19 billion a year ago.
Better still, here are five shareholder viewpoints as to why now is an ideal time to invest in Nvidia following its exhilarating Q1 report.
Image Source: Zacks Investment Research
Nvidia’s Guidance Continues to Impress…
Fueling the post-earnings spike in Nvidia’s stock was the company’s sales guidance which could keep the rally going in the coming weeks. To that point, Nvidia expects sales for the second quarter to increase 107% to $28 billion, guiding impressively above the current Zacks Consensus of $26.24 billion (Current Qtr below) or 94% growth.
Image Source: Zacks Investment Research
Nvidia is Becoming a Cash Cow
Starting to mirror Apple’s (AAPL - Free Report) impressive balance sheet, Nvidia is becoming a cash cow with the chip giant now having over $30 billion in cash and equivalents. Further illustrating the strength of Nvidia’s business operations is that its free cash flow climbed over 400% during Q1 at $14.93 billion compared to $2.64 billion in the comparative quarter. On a sequential basis, Nvidia’s free cash flow spiked 33% from $11.21 billion at the end of Q4.
Image Source: Zacks Investment Research
Stock Split
With NVDA now trading over $1000 a share, Nvidia announced it will be doing a 10-1 forward stock split that will take effect on Monday, June 10. Of course, the split is aimed at making stock ownership more affordable to employees and investors but this is another reason to believe NVDA could run higher beforehand.
Increased Dividend
One thing Nvidia will be doing with its growing cash pile is increasing its dividend by 150% from $0.04 a share to $0.10 per share. Notably, Nvidia returned $7.8 billion to shareholders during Q1 in the form of share repurchases and cash dividends. The increased dividend will be equivalent to $0.01 per share on a post-split basis and will be paid on Friday, June 28 payable to shareholders on record by Tuesday, June 11.
Industry Leadership
Lastly, being the leader of the AI boom has bolstered Nvidia’s growth and remains the most obvious reason to own its stock. Nvidia’s leadership among chipmakers will likely continue with its highly anticipated Blackwell series of GPUs.
Still expected to launch by the end of the year and thought to be the most advanced AI accelerative GPUs to date, Nvidia stated the production for the Blackwell series is in full swing with an impressive list of time-to-market customers including Amazon (AMZN - Free Report) , Alphabet (GOOGL - Free Report) , Meta Platforms (META - Free Report) , Oracle, (ORCL - Free Report) , Tesla (TSLA - Free Report) , and OpenAI among others.
Bottom Line
There was a lot to like about Nvidia’s Q1 results and for now, NVDA continues to sport a Zacks Rank #1 (Strong Buy) attributed to these compelling shareholder viewpoints and the fact that earnings estimate revisions have continued to rise.