Nvidia Stock Split Alert: What a 10-for-1 NVDA Split Means for You


  • Nvidia (NVDA) just reported another record-setting quarter, smashing Wall Street estimates.
  • The tech sector leader is now gearing up to enact a stock split scheduled for June 7.
  • This will allow retail investors to buy more of the company’s high-priced shares at a new price.
NVDA stock - Nvidia Stock Split Alert: What a 10-for-1 NVDA Split Means for You

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Do you own Nvidia (NASDAQ:NVDA) stock? If so, the number of shares you own is about to increase. The artificial intelligence (AI) leader is preparing to split its stock on a 10-for-1 basis, scheduled for June 7, 2024.

When the market opens on June 10, adjusted trading will commence. After a year of steady growth, NVDA stock has passed $1,000 per share after trading at less than $500 six months ago. Now, the Nvidia stock split will lower share prices in an attempt to make the highly-priced stock more accessible to new investors.

Given how well NVDA has performed over the past year, many retail investors will likely rush to scoop up shares once the split takes effect. This comes after the tech leader announced another record quarter, smashing Wall Street estimates for the first quarter of 2024.

What the Nvidia Stock Split Means for NVDA Stock

Given how much NVDA stock has surged this year, it makes sense that the company would opt for a stock split. High growth companies often split their stocks when shares have reached levels often too high for retail investors. In 2022, many of the tech sector’s biggest names opted for stock splits, including Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL) and Tesla (NASDAQ:TSLA). As such, an Nvidia stock split seems like a logical next step for the new Silicon Valley standout. The company announced its plans in its earnings press release, stating:

“The split will be effected through an amendment to NVIDIA’s Restated Certificate of Incorporation, which will result in a proportionate increase in the number of shares of authorized common stock. Each record holder of common stock as of the close of market on Thursday, June 6, 2024, will receive nine additional shares of common stock, to be distributed after the close of market on Friday, June 7, 2024. Trading is expected to commence on a split-adjusted basis at market open on Monday, June 10, 2024.”

For investors, this will likely end up being good news.

As CNBC reports, enacting a stock split doesn’t pose any changes to a company’s fundamentals. But it does lower the stock’s price, which often has a “positive psychological effect on retail investors,” generating a trading frenzy as smaller investors double down on shares. As such, an Nvidia stock split stands to generate even more growth for NVDA stock.

The company already showed investors that it is still growing well, as evidenced by its positive earnings report. Now, it is primed to continue rising as the stock split opens it up to a new group of investors.

Wall Street Sentiment Is Rising

Nvidia’s earnings smash has earned it even more praise from Wall Street. Analysts from banks such as Morgan Stanley, Wells Fargo and TD Cowen have all raised their price targets, while others have reiterated buy ratings. NVDA stock boasts a strong buy consensus on TipRanks, with 36 out of 37 analysts rating it as a buy and zero calling it a sell.

News like this will likely attract more retail investors who want to stock up on NVDA shares. The good news is that they will be able to after the Nvidia stock split takes effect. This announcement is good news for just about everyone except for Nvidia’s rivals.

On the date of publication, Samuel O’Brient 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.

Samuel O’Brient is a Reporter for InvestorPlace, where his work focuses primarily on financial markets, global economic trends, and public policy. O’Brient writes a weekly column on recent political news that investors should be following.

Article printed from InvestorPlace Media, https://investorplace.com/2024/05/nvidia-stock-split-alert-what-a-10-for-1-nvda-split-means-for-you/.

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