From Nasdaq: 2024-06-08 16:30:00

Nvidia has been a recent success in AI with a 10-for-1 stock split, but stock splits can be deceiving. The company’s stock performance over the years has been phenomenal, with average annual gains reaching 192% in the past year. Revenue has surged, increasing 262% year over year in the first quarter of fiscal 2025, reaching nearly $80 billion. However, excitement over the stock split may be overblown, as it is mostly an accounting event.

Stock splits increase the number of shares while decreasing the value of each share proportionally. Nvidia’s recent 10-for-1 split has fueled excitement, with shares rising over 20% since the announcement. Stock splits are mostly insignificant for investors, but can make shares more accessible for those with lower budgets. Reverse stock splits also exist, often used by struggling companies to prop up their stock prices.

As Nvidia’s stock price continues to soar, many are wondering if it’s too late to buy shares. While opinions on valuation vary, the company’s rapid growth potential may justify the seemingly high price. Investor decisions should be based on personal risk tolerance and long-term goals. The Motley Fool’s Stock Advisor team recommends other stocks for potential high returns, so consider all options before investing in Nvidia.



Read more at Nasdaq: Nvidia May Be an Exciting Stock, but Its 10-for-1 Stock Split — Like Most Stock Splits — Is a Nothing Burger