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Will Nvidia Stock Split in 2025?
Yes. Nvidia (NVDA) completed a ten-for-one stock split after the market closed on Friday, June 7, 2024, having unveiled the plan as part of its first-quarter results.
There had been Nvidia stock split rumors in the weeks leading up to this presentation as the share price was continuing to climb.
On Monday, June 10, NVDA started trading on a new 10-for-1 split basis, revising the Nvidia stock price before the split of $1,208.88 to $120.88. The NVDA stock price changed little at the opening, losing just about 0.4%.
Here, we look at the reasons behind this decision, examine the Nvidia stock split history, and learn what is likely to happen to the NVDA stock price.
Key Takeaways
- Nvidia completed a ten-for-one stock split on June 7, 2024.
- NVDA stock price has soared over the past year.
- The move has made owning its stock more affordable.
- Nvidia has now split its stock six times since 1999.
- Investors must still analyze the company’s prospects before making any investment decisions.
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When Is the Next Nvidia Stock Split?
The 10-for-one Nvidia stock split 2024 took place in early June 2024.
In a statement accompanying the company’s first-quarter results in May, Colette Kress, the company’s chief financial officer, said:
“We announced a ten-for-one forward stock split of our issued common stock to make stock ownership more accessible to employees and investors.”
Each record holder of common stock at the market close on Thursday, June 6, 2024, received nine additional shares of common stock.
Trading commenced on a split-adjusted basis when the market opened on Monday, June 10, 2024.
So, will Nvidia stock split again? Well, there are currently no plans to further divide the shares, but this is likely to depend on what happens over the next few years.
What to Expect From Nvidia Stock Split in 2024?
The NVDA stock price fell by 90% after the split. However, it’s important not to panic as this is effectively a technical change.
The company’s value and individual investors’ overall holdings will remain exactly the same as before the split.
All that’s changed is that existing shareholders got nine extra shares for each one they owned when the market closed on June 6, 2024.
The Nvidia stock price before the split stood at $1,208.88. As the stock market opened on Monday June 10, the new price was $120.88.
Wall Street analysts appear broadly optimistic about Nvidia’s prospects, although there are some concerns over whether its valuation is sustainable.
The stock is currently rated as a ‘moderate buy,’ according to 43 analysts compiled by MarketBeat. Thirty-eight see it as a ‘buy,’ one as a ‘strong buy,’ and four as a ‘hold.’
However, their consensus view, made before the stock split was completed, suggested a potential downside of around 6.51% on the $1,208.88 closing price on June 7, 2024.
Nvidia Stock Split History
So, how many times has Nvidia stock split?
The Nvidia stock split date of June 7, 2024, is the sixth time that Nvidia has made such a move since it went public in early January 1999.
Lindsey Stewart, Director of Stewardship Research and Policy at Morningstar Sustainalytics, said Nvidia is the latest of the ‘Magnificent Seven’ to split their stock in recent years.
“Amazon, Tesla and Alphabet all did so in 2022, and Apple did in 2020,” he said. “Out of the seven, only Meta has never split its stock.”
The chart below shows how many times similar companies have split their stock over the years.
How Many Times Has Nvidia Stock Split?
Nvidia has now split its stock on six occasions. The first three times were two-for-one splits that took place in 2000, 2001, and 2006.
The company then carried out a three-for-two split in 2007, with the Nvidia’s last stock split being a four-for-one division in 2021, before this year’s 10-for-one split.
Nvidia Stock Split History
| Date | Split Ratio |
|---|---|
| 2024-06-07 | 10:1 |
| 2021-07-20 | 4:1 |
| 2007-09-11 | 3:2 |
| 2006-04-07 | 2:1 |
| 2001-09-12 | 2:1 |
| 2000-06-27 | 2:1 |
Source: Nvidia, Companies Market Cap
Will Nvidia Stock Split Benefit Investors?
The main positive is that the stock split will make NVDA stock more affordable for would-be investors in the company.
According to the Nvidia stock split prediction of Dan Coatsworth at AJ Bell, the more people that can afford the shares, the bigger the pool of potential buyers. He said:
“It’s feasible to suggest the split will attract more people who will bid up the shares. The knock-on effect could be an increase in the overall value of Nvidia.”
Of course, there’s no guarantee this will happen. In addition, it’s also possible that the share price will initially undergo a share correction for technical reasons.
Existing Nvidia investors will simply have more shares in the company, although the value of their holdings will remain the same.
Someone with five shares in Nvidia would have an investment worth $6,000 based on the current $1,200 price prior to the split, according to Coatsworth. He explained:
“They will qualify for 45 new shares and get them for free, meaning they will have 50 shares in total. Once the share price adjusts, 50 shares at $120 each will be worth $6,000 in total – so no change to the current value of the pre-split investment.”
How Does Nvidia Stock Split Impact the Market?
The reality is that a Nvidia stock split is unlikely to have a major impact, according to Derren Nathan, head of equity research at Hargreaves Lansdown.
He told Techopedia: “This split doesn’t affect the company’s overall value or the total value of investor holdings, it only increases the number of shares available.”
Nathan pointed out that the value of the shares has grown more than 10 times in the five years leading up to the division, causing the price to exceed $1,000.
“Following the split, they’re now trading at around $120, a more accessible level for some buyers,” he added.
Nathan also believes the expansion in valuation has been more than matched by the performance of the business.
“Compared to 2020, this year’s sales are forecast to be up nearly 12-fold and operating profits to have grown by a factor of over 20,” he said. “There’s plenty to be excited about, but the comparatives are now very demanding. However, NVIDIA’s proven ability to move with emerging technological trends and raise the bar on processing power leaves it well placed to enjoy further success.”
Although stock splits have no impact on a company’s fundamentals – and shouldn’t impact the share price – that’s not always the case, according to Morningstar’s Lindsey Stewart.
“Studies show they often end up having a positive effect in practice, partly because a smaller stock price makes a stock more accessible for smaller investors to own and trade,” he explained. “Nvidia will no doubt be hoping that a split will help to maintain the phenomenal momentum its stock price has enjoyed over the last few quarters.”
What Is a Stock Split?
A stock split occurs when companies divide their existing high-value shares into a larger number of shares with a lower value.
One of the main reasons for a stock split is to make the stock more affordable for a wider number of potential shareholders.
It also results in the revaluation of the price per share to ensure that the overall market capitalization of the company does not change.
Why Are They Important to Investors?
It makes shares more affordable for investors who may have wanted to become shareholders but couldn’t afford to due to the high stock price.
According to Dan Coatsworth, investment analyst at AJ Bell, the stock split is a “neat little trick” to help potential investors who can only afford smaller sums.
“This includes its staff who use some of their salary to buy stock each month in a company share scheme,” he said.
The Bottom Line
It’s no surprise that Nvidia decided to split its stock. The company’s stock price had soared on the back of its bumper profit hikes. Earlier this year, the company stunned the stock market by revealing a 265% increase in fourth-quarter revenues to $22.1 billion.
The increases were fuelled by the surging global demand for accelerated computing and generative artificial intelligence (GenAI).
This boom has sent the NVDA stock price into orbit. While it was trading around $236 in early 2023, it hit an all-time high of $1,208.88 on June 7, 2024. This has obviously made owning NVDA stock impossible for many people, including many of the company’s own employees.
Whether the NVDA stock price continues to rise will depend on demand for its shares and how the company continues to perform.
FAQs
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References
- SECURITIES AND EXCHANGE COMMISSION FORM 8-K (SEC)
- NVIDIA (NVDA) Stock Forecast and Price Target 2024 (MarketBeat)
- NVIDIA – 25 Year Stock Price History | NVDA?(MacroTrends)
