“Logically, a stock split does nothing to change a company’s value. “If more super expensive companies follow with splits, the stocks could rocket even higher,” said Daniel Betancourt, a moderator and writer with investing site OptionsSwing. That has investing experts wondering whether similarly high priced stocks - such as Amazon or Netflix - may soon split as well. 'We had a fantastic quarter, with strong demand for our products driving record revenue,' said Jensen Huang, founder and CEO of NVIDIA.Both Apple and Tesla stocks have surged since announcing the splits.

At the same time, its datacenter revenue grew 79% year over year on a growing trend for NVIDIA's advanced processors used for power cloud computing, data centers, and artificial intelligence (AI). Revenue in the gaming segment jumped 106% on strong demand for the company's state-of-the-art graphics processing units (GPUs) used by gamers. To give that context, NVIDIA's $5.66 billion in revenue far exceeded the $5.3 billion it was guiding for. NVIDIA's first-quarter revenue climbed 84% year over year and its earnings per share surged 106%. Rather, it's NVIDIA's impressive results and the large and growing opportunity ahead that make it a timely opportunity. The real reason to buy NVIDIA stockĭespite all that, there are plenty of reasons that NVIDIA stock is a compelling buy right now - though it has nothing to do with the upcoming split. The impact of broader market trends, the overall economic picture, or some company-specific news could move the stock much more - up or down - than any anticipation regarding the upcoming share split. Investors can't know how NVIDIA shares will trade between now and the day of the stock split. Other investors with a shorter investing time horizon may simply sell their shares to capitalize on any irrational run-up in the stock price, in an attempt to make a quick buck.įinally, there's simply no way to know what the news cycle could bring on any given day.

After the split, that same investor will own 40 shares worth $190 each, also worth a total of $7,600 - illustrating that the total value of their holding ultimately won't change.įurthermore, even if there's greater demand for the stock because of the lower share price after the split, it will likely be a temporary phenomenon.

For example, if an investor holds 10 shares of NVIDIA stock, and each share is worth $760 pre-split, those 10 shares are worth a total of $7,600. On the face of it, it might seem that NVIDIA stock is a buy because of the upcoming stock split, but it doesn't hold up to closer scrutiny. What's the reason for the stock split? NVIDIA said the board declared the share split 'to make stock ownership more accessible to investors and employees.' A suitable opportunity?

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