Nvidia’s 10-for-1 stock split will reduce the price of each share from approximately $1,200 to about $120, making stock ownership more accessible. This move comes after Nvidia’s shift from generating revenue in the video game industry to dominating the AI chip market, resulting in record revenue of $26 billion. The company’s GPUs are the fastest in the market, securing over 80% of the AI chip market.
The stock split does not change the overall market value of Nvidia or the value of individual stakes, as it is simply a mechanical operation involving the issuance of new shares on a 10-to-1 ratio to current holders. This allows more investors to access Nvidia stock at a lower price and is a positive development for the company and shareholders. Buying or selling Nvidia stock during the split will result in the transfer of new shares to the new owner.
While a stock split is not a performance catalyst and may not significantly impact stock performance on Monday, it will make it easier for investors to enter the stock at a lower price point. This means investors can now access Nvidia shares for just over $100 per share, without having to invest in fractional shares or deal with brokerage limitations. Overall, the stock split is a strategic move by Nvidia to increase accessibility and provide more opportunities for investors to participate in the company’s growth story.
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https://www.fool.com/investing/2024/06/07/what-todays-stock-split-means-for-nvidia/