One of the most intriguing developments for investors over the past few years has been the return to popularity of stock splits. By and large, these moves have come on the heels of strong business performance, leading to equally strong stock price appreciation. Since stock splits don’t have any effect on the underlying value of the business, the primary reason cited by companies is the desire to keep their shares affordable for the average retail investor.
A look back at the past couple of years helps highlight this trend as numerous high-profile companies split their shares. These included:
Amazon: 20-for-1 split June 3, 2022
DexCom: 4-for-1 split June 10, 2022
Shopify: 10-for-1 split June 28, 2022
Alphabet: 20-for-1 split July 15, 2022
Tesla: 3-for-1 split Aug. 24, 2022
Palo Alto Networks: 3-for-1 split Sept. 13, 2022
Monster Beverage: 2-for-1 split March 27, 2023
Celsius Holdings: 3-for-1 split Nov. 15, 2023
A look at a few of the top-performing stocks of last year suggests there could be more stock splits on the docket in 2024.
Image source: Getty Images.
1. Nvidia
Nvidia (NASDAQ: NVDA) is best known for pioneering the graphics processing units (GPUs) that render lifelike images in video games. Over the years, the company has adapted its chips to provide the computational horsepower necessary for cloud computing and data center uses and, most recently, generative artificial intelligence (AI).
According to data compiled by New Market Research, Nvidia currently controls roughly 95% of the market for processors used in machine learning — an earlier branch of AI. This suggests the company is well positioned to lead the generative AI market as well.
Recent financial results seem to support that view. For its fiscal 2024 third quarter (ended Oct. 29), Nvidia delivered record revenue of $18.1 billion, up 206% year over year, while its diluted earnings per share (EPS) of $3.71 surged 1,274%. Tepid results from the prior year skewed the comparison, but it helps illustrate the long runway ahead.
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Nvidia has a long history of impressive growth, but excitement…
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