Exploring Nvidia’s 10-1 Stock Split: What It Means for Investors
Trading just over $120 a share, Nvidia’s NVDA 10-1 stock split went into effect today, making shares more accessible to a broader range of investors. This strategic move comes as the chip giant’s stock price tripled in 2023 and had already more than doubled this year.
The stock split, while not altering Nvidia’s overall market value, effectively lowers the cost per share, potentially attracting a wider array of individual investors who may have previously found the high price point prohibitive. This action prompts a critical discussion on whether it is now an opportune time to invest in NVDA, especially after trading near all-time highs of over $1,000.
Market Value and Industry Dominance
Nvidia’s dominance in the semiconductor industry, particularly in producing chips that power artificial intelligence (AI), has recently propelled its market capitalisation past Apple (AAPL), reaching over $3 trillion. This significant milestone makes Nvidia the second highest-valued company in the United States, trailing only behind Microsoft (MSFT).
This towering market cap underscores Nvidia’s supremacy within the semiconductor sector, far exceeding that of other notable competitors such as AMD (AMD) and Intel (INTC), which have market caps of $271 billion and $130 billion, respectively.
Post-Split Growth Trajectory
While stock splits do not influence a company’s underlying fundamentals or earnings, they do increase the number of shares outstanding, thereby diluting earnings per share (EPS). For Nvidia, the adjusted EPS for its current fiscal year 2025 is now forecasted at $2.65 per share ($26.54 per share/10). Looking ahead, EPS for fiscal year 2026 is projected to grow by 22% to $3.25.
Sales projections also paint a promising picture. Nvidia’s revenue is expected to surge by 91% in FY25, reaching $116.4 billion, up from $60.92 billion in FY24. Further growth is anticipated in FY26, with sales projected to climb another 22% to $142.29 billion.
The timing of Nvidia’s stock split appears to be highly strategic. The company is set to launch its Blackwell series of GPUs later this year, which are touted to be the most powerful AI chips available, surpassing its current H200 series and AMD’s MI300 series. This advancement is likely to bolster Nvidia’s market position even further and drive continued growth.
For potential investors, Nvidia’s stock split presents an appealing opportunity to enter the market at a more accessible price point. With the company maintaining a Zacks Rank #1 (Strong Buy), now might be an ideal time to invest in Nvidia’s expansive growth trajectory.
This article is intended for informational purposes and should not be considered as financial advice. Potential investors should conduct their own research and consider consulting with a financial advisor before making investment decisions.
