Nvidia has announced a stock split and higher than expected quarterly revenue, resulting in record high share prices and impacts on AI-focused cryptocurrencies.
Based in Santa Clara, California, Nvidia, a pioneer in GPU accelerated computing, is set to implement a ten-for-one stock split on June 7th, as well as increase its quarterly dividend by 150% to 1 cent per share post-split.
Stock splits are conducted to increase liquidity by dividing existing shares into multiple shares, usually done when share prices are high and can deter small investors.
Following the news, Nvidia’s shares surged by 5.9% to $1,005 in extended trading, surpassing the $1,000 threshold and adding approximately $140 billion in market value.
The chipmaker is forecasting second-quarter revenue to be around $28 billion, with a margin of plus or minus 2%, compared to analysts’ expectations of $26.66 billion.
In the first quarter, revenue spiked by 262% year-over-year to $26.04 billion, exceeding estimates of $24.65 billion, while net income soared by 628% to $14.88 billion.
Despite high hopes from crypto traders, the positive earnings from Nvidia did not immediately impact AI-related cryptocurrency tokens.
For instance, the decentralized graphics processing unit rendering platform on Ethereum, Render (RNDR), saw a 12% drop within hours of the earnings report, falling to $10.48.
Although RNDR experienced a 6.6% decrease with a 24-hour trading volume of $827 million, historical data suggests a potential rebound. During Nvidia’s Q4 earnings in February, RNDR surged by 38% within 48 hours.
Notably, a significant whale wallet transferred approximately $52.1 million worth of RNDR tokens to another wallet, indicating that major players are positioning themselves based on Nvidia’s results and potential market reactions.
Similarly, AI solutions platform Fetch.ai’s token FET saw a decrease from $2.65 to $2.45 around the time of Nvidia’s earnings announcement.
While other popular AI tokens like The Graph (GRT) and SingularityNet (AGIX) also recorded declines ranging from 4% to 6%.
Overall, industry experts remain optimistic that Nvidia’s strong performance will positively impact AI crypto tokens, as seen in previous market cycles. They believe that more investors may enter the market due to the stock split making shares more affordable, boosting confidence in tech and AI tokens.
Market watchers anticipate a positive correlation between Nvidia stocks and AI tokens, as traditional finance (TradFI) begins to utilize crypto tokens with high correlation to the traditional market. Retail investors are expected to benefit from reduced entry barriers due to the stock split, enhancing tokenization features.
In conclusion, Nvidia’s earnings reports are viewed as a positive influence on the market, potentially lifting all sectors in the industry. The future relationship between crypto and AI is still evolving, with retail investors expected to play a significant role in strengthening correlations between the two.