Nvidia (NASDAQ: NVDA) has soared over the past few years, and the stock added to gains in recent times when it announced something a lot of investors had been waiting for: a stock split. The company decided to launch a 10-for-1 split to bring its shares down to a level that would make it easier for a broader range of investors to buy. These operations involve the issuance of more shares to current holders to make that happen.
Prior to the operation, Nvidia surged to more than $1,000 a share — a level that may be a psychological barrier for some investors and a difficult buy for those aiming to take a small position. Now, with Nvidia shares trading around $120, these problems have disappeared. So, though stock splits aren’t catalysts for share performance, they can represent a positive move for a company.
But Nvidia’s big moves this year aren’t over. In fact, Nvidia has something major planned for the second half. My prediction is this move from the artificial intelligence (AI) chip giant will be much bigger than the stock split — and offer you a great reason to buy the stock. Let’s check out what’s ahead.
Image source: Getty Images.
Nvidia’s lower per-share price
Of course, gaining access to Nvidia for a lower per-share price, thanks to the stock split, is exciting, but it’s important to remember that splits don’t change a company’s valuation: Nvidia isn’t any cheaper today than it was prior to the split. In fact, a stock split doesn’t change anything fundamental.
This upcoming move, however, will. First, a bit of background. Nvidia already is the world’s AI chip leader, with its graphics processing units (GPUs) holding 80% share of the market. This is because Nvidia’s GPUs are the fastest around, powering critical AI tasks like training and inferencing — the processes that help large language models do their job of solving complex tasks.
Nvidia also sells a variety of related AI products and services that make it the go-to destination for those launching an AI project. All of this has helped the company increase revenue and net income in the triple digits quarter…
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