If a Nvidia Investment Is Too Rich for You, Good News

A blowout earnings report from Nvidia lifted the Nasdaq Composite to a fresh record on Thursday, rising 0.7% as of 12:45pm ET. Nvidia itself rose 10.8% in the wake of its Wednesday report, which saw revenue up 262% in the latest quarter compared to a year earlier and profit up a staggering 629%, reports the AP. More:

• The driver: CNBC reports the surge is powered by Nvidia's data center business, which grew 427% in the latest quarter "as companies keep snapping up its artificial intelligence processors." Sales of its graphics processing units to leading cloud providers like Microsoft Azure and Amazon Web Services accounted for close to 50% of Nvidia's $22.56 billion in data center sales for the quarter.

• About those data centers: CEO Jensen Huang said Nvidia intends to balloon its role in the space by building not just the AI, central processing, and networking chips but also the data centers themselves, reports the Wall Street Journal. "This is not a chip business. You're building data centers, and if anybody's ever seen a data center, go take a look and imagine the unbelievable amount of technology that goes into building these things."
• Why that matters: The Journal says it could be one way to avoid a potential slowdown for Nvidia as startups work to figure out an AI model that will have a positive ROI and more aggressively investigate ways to make use of "smaller models that can be effective for specific tasks but don't require as much of the computational firepower that depends on Nvidia's chips."
• What's coming: The other big Wednesday news was Nvidia's announcement of a 10-for-1 stock split. As CNN reports, shares have surged more than 2,500% over the past five years from sub-$50 to more than $1,051 as of Thursday (a nearly 10% rise from Wednesday's close). The June 10 split will see each common share split into 10 smaller ones, making it less expensive for someone to invest in the company.
• Potential implications of the stock split: Demand for the shares could surge, reports Business Insider, which continues, "It could also fuel speculation that Nvidia might be added to the price-weighted Dow Jones Industrial Average. If the AI behemoth joins Big Tech peers such as Apple, Amazon, and Microsoft, that would broaden its shareholder base to include all the passive investors in that index."

(More Nvidia stories.)