Shares of Nvidia (NASDAQ:NVDA) begin trading on a 4-for-1 split adjusted basis this morning in a move than management hopes will make them more affordable to individual investors. Ahead of the split, NVDA stock defied the market’s widespread decline on Monday, gaining 3.41%.
The split comes as the shares have gained about 43% this year, fueled by demand for data-center chips and its technology that’s favored by gamers and cryptocurrency miners. By comparison, the iShares Semiconductor ETF (NASDAQ:SOXX) has increased 12.8%. NVDA is the largest holding in the exchange-traded fund’s 32-stock portfolio, at a 9.24% weight.
The tech maker is pushing ahead with its $40 billion acquisition of UK-based chipmaker Arm, despite reports last month that the deal could go south. The European Commission needs until September to gather information before it can accept a formal application. This means the odds of closing by the March 2022 deadline are falling by the day.
Once this deal closes, Nvidia will enjoy a competitive advantage in the industry. It also will become a major player as a provider for the chip industry and will rule the world of artificial intelligence (AI).
In September, Nvidia unveiled new GeForce gaming graphics processing units (GPUs). In April, Nvidia unveiled its first central processing unit (CPU), called Grace, which uses Arm’s chip designs for high-end computing and AI applications.
NVDA Stock Remains Analyst Favorite
Wall Street continue to see only green for Nvidia, as 26 out of 27 analysts rate it a “buy,” according to Tipranks. KeyBanc analyst John Vinh has an “overweight” rating with a price target of $950. The analyst believes that the gaming demand will remain robust and will drive sales. Rick Schafer, an Oppenheimer analyst has a price target of $925 with an “outperform” rating. At Truist, analyst William Stein has raised his price target to $910 and has a “buy” rating on NVDA shares.
Earlier this year, Nvidia said revenue from chips used for gaming, which make up about half of its overall total, rose 106% from last year to $2.76 billion, while sales of its CMP product line, the choice of crypto miners, came in at $155 million. Data center sales were up 79% from last year to $2.05 billion.
On the date of publication, Robert Lakin did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
InvestorPlace contributor Robert Lakin is a veteran financial writer and editor, including previous stints with Bloomberg News and as a buyside equity research editor. His Substack newsletter, TLV Strategist, covers the Israel business scene.
