Nvidia’s recent stock split has made its shares more accessible to a wider range of potential buyers, with the stock now trading around $135 compared to over $1,200 before the split. Despite appearing more reasonably priced post-split, the stock is actually trading at a higher valuation of 50x future earnings estimates, up from about 30x just over a month ago.
While the stock may seem more expensive now, Nvidia’s dominance in the AI chip market has been driving its profits higher. The company’s 10-for-1 stock split in June was welcomed by investors, leading to a 27% gain in share price from the announcement to the split date, and a further 12% increase since then.
Although Nvidia’s stock is currently more expensive than before the split, the company’s strong position in the AI chip market and upcoming Blackwell architecture launch suggest continued growth in the future. Nvidia’s diverse product offerings and leadership in emerging AI areas like sovereign AI are also positive indicators for long-term success.
Overall, despite the higher valuation post-split, Nvidia remains a worthwhile investment with the potential to continue rewarding investors as the AI market expands and the company continues to innovate in the space.
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https://www.fool.com/investing/2024/06/21/nvidia-post-stock-split-expensive-or-cheap/