NVIDIA, the company behind those powerful computer chips that run video games and AI, has been on fire lately. Its stock price has gone through the roof, almost tripling in just one year.
That’s why, on June 7, 2024, NVIDIA did something big – they split their stock 10-for-1. This means if you had one share before, now you have ten, but each share costs less.
This isn’t new for NVIDIA. They’ve done this six times since going public in 1999.
Why? When a stock becomes too expensive, some people can’t afford to buy even one share. By splitting the stock, more people can invest.
Now, with NVIDIA leading the charge in AI technology, everyone’s wondering: Is NVIDIA stock going to split again?
Look at NVIDIA’s stock split history and what it might mean for the future.
NVIDIA’s Stock Split History
How many times has NVIDIA stock split?
So, before moving forward, let’s look at NVIDIA’s stock split history.
In 1999, since it went public, NVIDIA has split its stock six times.
Let’s break down each of these splits:
- June 27, 2000: 2-for-1 split
- September 12, 2001: 2-for-1 split
- April 7, 2006: 2-for-1 split
- September 11, 2007: 3-for-2 split
- July 20, 2021: 4-for-1 split
- June 7, 2024: 10-for-1 split
In the early days, NVIDIA was aggressive with its splits. They did three 2-for-1 splits in just six years. This means that for every share you owned, you got two. It’s like doubling your pizza slices, but each slice is smaller.
Why did NVIDIA do this?
In the early 2000s, they tried to keep their stock price below $100, making it easier for more people to buy shares.
It’s like keeping the price of a movie ticket low so more folks can go to the cinema.
Then, things slowed down a bit. NVIDIA didn’t split its stock again until 2007. This time, they did a 3-for-2 split. It’s like getting an extra half slice for every slice of pizza you had.
After that, NVIDIA took a long break from splitting for about – 14 years!
But in 2021, as the company was riding high on the AI wave, they did a 4-for-1 split. This was bigger than before, turning one share into four.
Finally, we come to the most recent split in 2024.
This was the biggest yet – a 10-for-1 split. If you had one share before, now you have ten. It’s like turning one giant cookie into ten smaller ones.
Impact of Stock Splits on NVIDIA’s Performance
Seeing what happens next when a company splits its stock is always interesting. Let’s look at how NVIDIA’s stock has performed after its splits, both in the short and long term.
Short-Term Effects
Surprisingly, NVIDIA’s stock often took a dip right after a split. Here’s what happened after each split:
- 2000 split: The stock fell immediately and was significantly down by year-end.
- 2001 split: Again, the stock dropped after the split.
- 2006 split: The stock went up before the split but fell shortly after.
- 2007 split: The stock climbed before the split but took a big dive.
- 2021 split: This time was different! The stock jumped both before and right after the split.
Long-Term Performance
Now, let’s look at how the stock did in the year after each split:
- 2000 split: One year later, the stock was up quite a bit.
- 2001 split: The stock was down 72% after a year.
- 2006 split: The stock was up, but only by 1% after a year.
- 2007 split: Another tough year, with the stock down 70%.
- 2021 split: The stock was down 4% a year later, but still better than earlier splits.
Comparison To The Market
How did NVIDIA compare to the overall stock market? Well, it’s been a mixed bag:
- Sometimes, NVIDIA did worse than the market. For example, in 2006, NVIDIA was up only 1%, while the S&P 500 rose more than 13%.
- Other times, NVIDIA outperformed. After the 2021 split, even though NVIDIA was down 4%, it still beat the S&P 500, which fell more.
It’s important to note that some of these splits happened near big market crashes. The 2000 and 2001 splits were around the dot-com bubble burst, and the 2007 split was just before the 2008 financial crisis. These big economic events probably had more impact on NVIDIA’s stock than the splits themselves.
The 2024 Stock Split: A Closer Look
Let’s zoom in on NVIDIA’s latest stock split on June 7, 2024. This was a big one – a 10-for-1 split.
What does that mean?
If you had one NVIDIA share before the split, you’d have ten. It’s like trading your $100 bill for ten $10 bills.
Before the split, NVIDIA’s stock traded at a whopping $1,208.88 per share.
That’s a lot for one share!
After the split, the price dropped to $120.88. This makes it much easier for everyday investors to buy NVIDIA stock. It’s like making a fancy restaurant more affordable so more people can eat there.
So, what happened right after the NVIDIA stock split in 2024?
Unlike some of NVIDIA’s earlier splits, this one went well with investors. The stock price dropped slightly, losing about 0.4% when trading started again. That’s like barely losing a penny on your dollar – not too bad!
This positive reaction might be because NVIDIA has been doing so well lately. The company’s been riding high on the AI wave, using its chips in all sorts of exciting new technologies.
Comparison to other tech giants’ recent stock splits: NVIDIA isn’t the only big tech company splitting its stock.
Let’s see how it compares to some others:
- Amazon, Tesla, and Alphabet (Google’s parent company) did stock splits in 2022.
- Apple did a split in 2020.
- Out of the “Magnificent Seven” tech giants, only Meta (Facebook) has never split its stock.
NVIDIA’s 10-for-1 split is more significant than these others. For example, Amazon and Alphabet had 20-for-1 splits, while Tesla had a 3-for-1 split.
Factors Driving NVIDIA’s Growth
NVIDIA’s success isn’t just about stock splits. Let’s look at what’s powering this company:
Leadership In AI And GPU Markets
NVIDIA is like the top chef in the AI and graphics kitchen. They make the best chips for these technologies. They own more than 90% of the market for AI chips. That’s huge!
Financial Performance And Revenue Growth
NVIDIA’s bank account is getting fatter by the day. In early 2024, they reported a mind-blowing 265% jump in their fourth-quarter revenues, reaching $22.1 billion. That’s like your allowance suddenly becoming 2.65 times more significant!
Future Growth Prospects In AI And Data Center Markets
The future looks bright for NVIDIA. As more companies want AI, they’ll need NVIDIA’s chips. It’s like NVIDIA sells shovels in a gold rush – everyone needs their tools!
Potential for Future Stock Splits
Is NVIDIA stock going to split again? Let’s think through the facts & figures below:
- Even after the 10-for-1 split, NVIDIA’s stock is still pricey at around $120. If it keeps growing fast, it might get too expensive again.
- They might consider another split if NVIDIA’s stock price skyrocketed past $1,000 again.
- Some experts think NVIDIA might split again within a year if the stock price keeps climbing.
But it’s all estimated guesswork – only NVIDIA could shed light on this information in the future!
Implications for Investors
What does all this mean if you want to invest in NVIDIA?
- Remember, NVIDIA’s stock often dipped right after a split, but it’s been a winner over the long term. It’s like a rollercoaster that ends up higher than where it started.
- Don’t just buy because of a split. Look at NVIDIA’s strong position in AI and its growth. But remember, even great companies can have ups and downs.
- NVIDIA’s future looks bright with AI booming. But investing always comes with risks. Monitoring how well NVIDIA keeps up with new tech and competition is brilliant.
Conclusion
Let’s take a quick recap of key points.
- NVIDIA has split its stock six times, most recently a 10-for-1 split in 2024.
- These splits make the stock more affordable but don’t change the company’s value.
- NVIDIA is a leader in AI chips, which is driving its fantastic growth.
- Splits might happen if the stock price keeps rising.
NVIDIA’s stock splits show it wants to keep its shares accessible to more investors. With its strong position in AI, NVIDIA looks set for more growth.
But remember, in the stock market, nothing is certain. Always do your homework by reading ABBO News blogs before investing!
