Wall Street’s Most Anticipated Artificial Intelligence (AI) Stock Split of the 4th Quarter Has Arrived
For much of the last 30 years, investors have had a next-big-thing technology or trend to captivate their attention. The rise of the internet, business-to-business commerce, and cloud computing are just some of the big-dollar addressable markets that have lured investors.
But on rare occasion, two hot trends vie for Wall Street’s attention at the same time. In 2024, we’ve witnessed the artificial intelligence (AI) revolution and stock-split euphoria converge to lift the stock market’s major indexes to record-closing highs.
A stock split is a tool publicly traded companies have available to cosmetically adjust their share price and outstanding share count by the same factor. What makes these share price adjustments “cosmetic” is that they have no impact on a company’s market cap or operating performance.
Though there are two varieties of stock splits — forward and reverse — investors focus most of their attention on companies completing forward stock splits. Whereas reverse splits, which increase a company’s share price, are often conducted from a position of operating weakness, the businesses enacting forward splits are pretty consistently outpacing their competition with regard to innovation and operational execution.
Since the start of 2024, a little north of a dozen noteworthy companies has announced and/or completed a stock split. All but one of these high-profile splits is of the forward variety, which aims to make shares more nominally affordable for everyday investors.
With AI stocks surging in 2024, it’s no surprise that some of the most-prominent stock splits are leading AI companies. But after the close of trading today, Sept. 30, the most-anticipated AI stock split of the fourth quarter will take center stage.
Nvidia and Broadcom were Wall Street’s preeminent AI stock splits of 2024
Over the last four months, Nvidia (NASDAQ: NVDA) and Broadcom (NASDAQ: AVGO) have hogged the headlines among artificial intelligence stocks — and for good reason.
On May 22, Nvidia became the first AI stock to announce its intent to split its shares. Following a greater than $2 trillion increase in Nvidia’s market cap in less than 17 months, the company’s board declared a 10-for-1 forward split, which went into effect following the close of trading on June 7.
Nvidia’s historic increase in value relates to its early stage dominance of the AI-graphics processing unit (GPU) market. The company’s variety of GPUs, including the ultra-popular H100, hold a virtual monopoly in enterprise AI-accelerated data centers.
Wall Street’s Most Anticipated Artificial Intelligence (AI) Stock Split of the 4th Quarter Has Arrived, source.
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