Stock split fever has taken hold of investors, with popular companies like Chipotle Mexican Grill, NVIDIA, and Broadcom announcing their plans to split their shares. Chipotle shocked investors with a 50-for-1 split in March, while NVIDIA followed suit with a 10-for-1 split in May. Most recently, Broadcom announced a 10-for-1 split last week.
When it comes to choosing between these three companies, the stock splits themselves don’t hold much weight in the decision-making process. Stock movements correlate with earnings over the long term, and the splits won’t change the underlying businesses or prospects of Chipotle, NVIDIA, or Broadcom.
In terms of valuation, Chipotle’s high forward earnings multiple and PEG ratio make it the least attractive option among the three. On the other hand, both Broadcom and NVIDIA have strong growth prospects and more reasonable valuations. Broadcom’s revenue and profits are on the rise, thanks to demand for its AI products, while NVIDIA’s revenue and earnings have seen significant increases due to the demand for its GPUs in AI systems.
While both Broadcom and NVIDIA may not be considered cheap by traditional metrics, their growth potential in the AI industry makes them attractive options for investors. Ultimately, with NVIDIA’s strong growth trajectory in the AI space, it emerges as the best stock split option among the three.
Keith Speights has no position in any of the stocks mentioned and states that The Motley Fool has positions and recommends Chipotle Mexican Grill and NVIDIA. The Motley Fool also recommends Broadcom and has a disclosure policy in place.
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https://www.fool.com/investing/2024/06/18/best-stock-split-buy-nvidia-broadcom-or-chipotle/
