If you don’t know a lot about the semiconductor giant Nvidia (NASDAQ: NVDA), it’s worth learning, because the company has been a huge success lately in the field of artificial intelligence (AI). Nvidia is often in the news, and most recently that’s due to a 10-for-1 stock split, which got many investors excited.
But most stock splits — including this one — are not as exciting as they may seem. Before we tackle stock splits, let’s agree that Nvidia, the company, is exciting. Its stock performance certainly is:
Period
Average Annual Stock Gain
Past 1 year
192%
Past 3 years
89%
Past 5 years
103%
Past 10 years
73%
Past 15 years
50%
Data source: Morningstar.com, as of June 3, 2024.
Those are eye-popping numbers. A 50% annual return will increase an investment more than 437-fold over 15 years! If you only owned Nvidia over the past five years, your stake would have doubled in value each year, on average.
Nvidia’s stock performance is exciting because the underlying business is exciting. Over the years, Nvidia grew from a specialist in gaming chips to one that’s now getting most of its revenue from its data center technology. That’s due to the soaring prevalence of artificial intelligence (AI), which is requiring more and more semiconductor firepower.
Check out some additional exciting numbers from Nvidia:
Year
Total revenue, in billions
2024
$60.9
2023
$27.0
2022
$27.9
2021
$16.7
2020
$10.9
2019
$11.7
2018
$9.7
2017
$6.9
2016
$5.0
Data source: Morningstar.com.
In the first quarter of Nvidia’s fiscal 2025, revenue was up a stunning 262% year over year! And total revenue for the trailing 12 months is nearly $80 billion as artificial intelligence fuels further data center growth. (Indeed, AI may even fuel further growth in Nvidia’s gaming business.)
Nvidia’s stock split is not so exciting
Despite legitimate enthusiasm over Nvidia and its stock, excitement over its 10-for-1 stock split (which occurred on June 7) is misplaced. Shares have surged more than 20% as of June 3 since the company announced impressive first-quarter results and the stock split on May 22.
What’s a stock split?
Stock splits increase the…
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