Nvidia’s CEO Jensen Huang speaks during the annual Nvidia GTC Artificial Intelligence Conference at SAP Center in San Jose, Calif., on March 18, 2024. (JOSH EDELSON/AFP via Getty Images)Â (JOSH EDELSON via
Nvidia (NVDA) has announced a 10-for-1 stock split following its impressive earnings report, with shares closing at a record high of $1,038. This split will reduce the per-share price to about $104, distributing 10 shares for every one currently held. Although stock splits don’t alter a company’s intrinsic value, historical data shows an average 12-month post-split return of 25.4%, suggesting positive market reception. This move coincides with a 150% dividend increase, raising Nvidia’s annual dividend payment from $395 million to nearly $1 billion.
CEO Jensen Huang highlighted robust demand for Nvidia’s chips and substantial profit and sales growth, over 400% and 200% respectively. Despite Nvidia’s free cash flow of nearly $15 billion last quarter, the dividend hike signals confidence in continued growth amidst the AI boom. Nvidia’s stock performance has been extraordinary, with a 2,600% increase over five years, vastly outpacing the Nasdaq’s 120% gain. The dividend increase and stock split suggest Nvidia is strategically enhancing shareholder value while capitalizing on its strong market position.
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