Nvidia is splitting stock 10-for-1 after strong earnings results, making shares more accessible

From Morningstar: 2024-05-24 05:30:00

Semiconductor firm Nvidia is splitting its stock 10-for-1 after strong earnings results. Shares are up over 90% this year and more than 200% in the past 12 months. The split is set for June 7, with shares trading on a post-split basis from June 10. Nvidia’s revenue for the first quarter was $26 billion, up 18% from the previous quarter.

The stock split will increase the number of outstanding shares but not the company’s overall value. It will make Nvidia more accessible to smaller investors. The firm’s fair value estimate will be adjusted to $105 post-split, with no change to its wide economic moat rating or 3-star rating. Nvidia remains a top player in artificial intelligence.

Nvidia’s first-quarter earnings show it leading in generative AI capabilities, with strong revenue growth expected from data centres. The company doesn’t expect a slowdown in AI demand. Stock splits, like Nvidia’s 10-for-1, are done to attract more buyers and improve liquidity. Other companies, such as Walmart and Alphabet, have recently split their shares.



Read more at Morningstar: What Does Nvidia’s Stock Split Mean for Investors?