NVIDIA's capitalization has grown by more than $1 trillion this year alone in the wake of the AI boom. The company's stock price has exceeded the level at which it last split. There is an opinion that the manufacturer will carry out this procedure again, writes Bloomberg.
NVIDIA last announced a 4-for-1 stock split in May 2021, when it was trading at around $600. Today they continue last year's growth of 240% and are very close to $1000. To once again attract the attention of small retail investors, the company, as traders expect, may carry out another split next year. When NVIDIA implemented this process in 2021, it explained its decision as a desire to “make stock ownership more accessible to investors and employees.” The split took place on July 19, 2021, and by that time the shares had risen to $750.
A stock split is a cosmetic measure, usually used to attract small investors. The amount of capital is redistributed to a larger number of securities, due to which their price decreases, but nothing changes in the fundamental indicators or valuation of the company. NVIDIA hasn't given any hints that it intends to split anytime soon, and as its shares continue to rise in price, retail investors don't seem to be deterred by the price. Its securities are among the most traded among small investors, along with Tesla, AMD and Supemicro. For those who can't afford the current price of $927, fractional shares are available.
Last year, as technology stocks rose in price, no member of the Nasdaq 100 index split shares. Apple and Tesla went through this procedure in 2020, and this was the second split in two years for the automaker. Microsoft hasn't done this since 2003, when its shares were worth $50; they now trade around $400. If NVIDIA continues its ascent, splitting up makes sense for it, experts say.
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