Nvidia has announced a stock split and exceeded revenue expectations for the quarter, driving its shares to all-time highs and impacting AI-focused cryptocurrencies.
Based on a report released on May 25, the Santa Clara, California-headquartered company, known for pioneering GPU accelerated computing, is set to carry out a ten-for-one stock split starting June 7. Additionally, it will increase its quarterly dividend by 150% to 1 cent per share after the split.
Stock splits are typically conducted by companies to enhance liquidity by dividing existing shares into multiple shares. This move is especially common when share prices become too high, posing a challenge for smaller investors.
Following the news, Nvidia’s shares surged by 5.9% in after-hours trading, exceeding the $1,000 threshold and adding approximately $140 billion in market value.
The leading chipmaker anticipates fiscal second-quarter revenue to reach $28 billion, with a margin of plus or minus 2%. This exceeds the $26.66 billion in revenue that analysts had predicted based on LSEG data.
In the first quarter, revenue skyrocketed by 262% year-over-year to $26.04 billion, surpassing estimates of $24.65 billion. Net income also saw a significant increase, rising by 628% to $14.88 billion.
Despite high expectations from cryptocurrency traders, Nvidia’s robust earnings did not immediately impact AI-related cryptocurrency tokens.
For instance, Render (RNDR), a decentralized GPU rendering platform on Ethereum, experienced a 12% decline within five hours of the earnings announcement, dropping to $10.48. Presently, the token has decreased by 6.6% with a 24-hour trading volume of $827 million, according to CoinMarketCap data.
Although there was an initial drop, historical data suggests a potential rebound. During Nvidia’s Q4 earnings event in February, RNDR surged by 38% within 48 hours.
In light of a known whale wallet transferring around $52.1 million worth of RNDR tokens to an unknown wallet, holders are anticipating a possible “sell the news” event, indicating that major players are strategically positioning themselves based on Nvidia’s results and potential market reactions.
Moreover, the AI solutions platform Fetch.ai’s token FET was trading at approximately $2.65 during Nvidia’s earnings announcement, but has since declined by 2.8% to $2.45. Similarly, other prominent AI tokens like The Graph (GRT) and SingularityNet (AGIX) also experienced drops ranging from 4% to 6%.
Despite the challenges faced by AI crypto tokens, market observers are optimistic about the positive impact of Nvidia’s strong performance on this sector, as seen in previous market cycles.
Industry experts believe that the correlation between Nvidia stocks and AI tokens remains significant, with potential for further growth and integration. This strong performance by Nvidia is viewed as a positive development for the entire sector, boosting confidence in tech and AI tokens.
As market participants eagerly anticipate the future dynamics between crypto and AI, the influence of traditional sectors on cryptocurrency markets is becoming increasingly evident. The stock split announcement by Nvidia is expected to have a transformative effect on AI crypto tokens, potentially driving increased participation from investors and strengthening the overall market for tech and AI-related assets.