So, what just ended? None other than the yearly event everyone eagerly looks forward to.
Nvidia, the heart of the AI revolution, had its 10-for-1 forward split less than a day after the business market closed on Friday, June 7. The term “stock split” refers to the process where publicly listed companies change the look of their share price and the number of shares available, keeping the same base.
Does it impact the firm’s total market worth or operating capacity? Nope.
But does it make stock more reasonably priced for retail investors? Yep, that’s possible with a forward-stock split. Exactly what Nvidia just did.
Over the past three years, investors find themselves more attracted to companies doing stock splits since they usually outperform.
Take Nvidia for example, who just completed their second split since July 2021 and have gained $2.68 trillion in market value in a bit more than a year. Sounds good on paper, right?
Well, Nvidia offers good reasons for investors to jump on board. On June 5, Nvidia’s market value tipped over $3 trillion.
Yup, even overtook Apple for America’s second-largest public firm.
Nvidia has added about $2.68 trillion since 2023 started. What’s behind all this growth? AI. Nvidia’s AI-based GPUs play a crucial role in powerful data centers. It’s estimated that they control around 90% of the AI-GPU market share.
Their much-loved H100 GPU is a favorite for generative AI solutions and training language models. Nvidia’s forward-thinking gives it an edge too.
The upcoming Blackwell chip, priced between $30,000 to $40,000, is predicted by iffy Wall Street folks to be out of stock till potentially 2025. Clearly, there’s more demand than supply.
That’s why Nvidia bumped up the price for its AI-GPUs and enjoyed a huge gross margin increase — 78.35% for the fiscal first quarter of 2025 that ended on April 28th. All this and still Nvidia stock is a bargain, considering their shares grew 738% in little over a year.
34 times the future-year earnings might seem steep, but with Wall Street predicting an annual earnings growth rate of 46.5% for the next five years, the price tag seems fair.