Nvidia Proves Its Worth as the 'World's Most Important Stock' Amid Market Adjustments [Learn Premium Weekly Review]

On May 15, the U.S. released April CPI data showing a slowdown in inflation, giving the market a sigh of relief. However, on May 23, S&P Global's preliminary May U.S. PMI data unexpectedly showed an uptick in economic activity, with business activity reaching its fastest expansion in over two years. This spooked the stock market, causing major indexes to pull back from their record highs.

Following rate cut expectations as a key factor influencing the U.S. stock market, we can often find inconsistent data. So, the key to avoiding panic is identifying the primary drivers behind sustained market growth.

Looking back at Q1, despite continued pressure on rate cut expectations, U.S. stock indexes remained strong. Major tech giants, in particular, surged higher, repeatedly setting new records, driven by AI demand. This clearly shows that the impact of AI-driven industry opportunities now outweighs the influence of potential rate cuts on the stock market.

Nvidia's latest earnings report, which far exceeded expectations, further confirmed this. The AI bull market still has significant room to grow. While short-term pressures from stalled rate cuts may lead to pullbacks, Wall Street remains optimistic about the future of U.S. stocks.

Revenue: Q1 revenue was $26 billion, up 262% year-over-year, surpassing Wall Street’s expectation of 240%. For Q2, Nvidia forecasted $28 billion in revenue, better than the market’s expected $26.8 billion.

Net Profit: Net profit was $14.88 billion, up 620%, with a gross margin of 78.9%, exceeding analysts’ estimates of 77%.

Segment Performance: The data center segment showed robust growth with $19.4 billion in revenue, up 478% year-over-year, driven by increased shipments of Nvidia’s Hopper GPU computing platform for training large language models and generative AI. Addressing concerns about a potential demand gap due to slow shipments of the next-gen Blackwell GPU, CEO Jensen Huang mentioned that Blackwell GPUs will ship in Q2 and ramp up production in Q3, and they will be backward compatible with Hopper systems.

Stock Split: Nvidia announced a 10-for-1 stock split. Shareholders on record by the close of June 6 will receive nine additional shares for each share held, making the stock more affordable for investors. Reviewing NVIDIA's history of reverse stock splits, the upside potential of the announcement → split is huge.