If you want to participate in the upcoming share split of tech giant Nvidia (NASDAQ:NVDA), you’ve got to act quickly. Those who hold NVDA stock at the end of today’s session will receive nine additional shares of the security following the end of tomorrow’s session, per USA Today. Simply put, the Nvidia stock split represents the blistering performance of the underlying business.
In late May, Nvidia delivered a blockbuster earnings report for its first quarter of fiscal 2025. Earnings per share landed at $6.12 on revenue of $26.04 billion. In contrast, Wall Street analysts had anticipated EPS of $5.60 on sales of $24.59 billion. For the current year, experts are projecting consensus earnings of $27.03 per share with a top line of $120.41 billion.
Along with the stunning Q1 report, management announced a 10-for-1 split of NVDA stock along with a dividend increase. Investors who own shares at the end of Tuesday’s session next week will receive a payout of 1 cent per share. Dividends will be paid on June 28.
Gargantuan Performance Drives the Case for the Nvidia Stock Split
According to The Wall Street Journal, Nvidia breached the $3 trillion market capitalization level. This milestone even makes NVDA “more valuable than many national stock markets, at least as measured by broad equity indexes.” As of now, its market value is closing the gap with the FTSE All-Share Index. NVDA has already surpassed the equity benchmarks in Toronto and Seoul, which explains the core reason behind the Nvidia stock split.
Buying NVDA stock can be onerous for investors who lack access to brokerages offering fractional equity ownership. Pre-split, the security is trading hands around $1,200, which may not be accessible to many retail investors. Essentially, NVDA’s success has become its own challenge. However, with a 10-for-1 split, the per-unit offering will be lowered, enabling greater access.
Fundamentally, the Nvidia stock split offers no impact to the company’s valuation: it just makes the shares “cheaper” and thus more accessible. However, because of the intense demand for NVDA, it’s possible that a broadened scope could lead to even more upside.
With its $3 trillion market cap, Nvidia briefly joined Microsoft (NASDAQ:MSFT) as the only enterprise that reached such a lofty height.
On the date of publication, Josh Enomoto 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.
