Nvidia (NVDA) is a major manufacturer of computer chips. On Monday, it will divide its shares ten to one. This means if you have one share, you will now have ten. This is happening because Nvidia’s stock price went up a lot, by 212% in the last year.
Nvidia is currently valued $3 trillion. Only Apple (AAPL) and Microsoft (MSFT) are valued at this level among American corporations.
Experts believe that the split of the stock is beneficial. A stock split indicates that the company believes its stock will continue to rise, according to S&P Dow Jones Indices’ Howard Silverblatt.
Adam Coons from Winthrop Capital says more people might buy Nvidia stock after the split. But he warns that this could make the stock price go up and down a lot because new investors might buy and sell quickly.
Julian Emanuel from Evercore ISI thinks the stock price might change a lot after the split. However, he believes this is a great time to purchase Nvidia stock. In his view, Nvidia is currently one of the most significant tech companies.
Historically, stock splits have benefited businesses. According to Bank of America, after a year, the value of companies that split their stocks increases by 25%, while that of other companies increases by 12%.
So, Nvidia’s 10-for-1 stock split demonstrates that the company is doing very well. Even though the stock price fluctuates, many people think now is a good time to buy Nvidia stock.
