Nvidia, the renowned chipmaker, made headlines in its fiscal first-quarter earnings report by announcing a 10-for-1 forward stock split. According to the company’s release, the shares will begin trading on a split-adjusted basis starting June 10, 2024.
NVIDIA Share Price: AI Leader’s Stock Soars After 600% Profit Surge and 10-for-1 Stock Split Announcement
Understanding the Stock Split
While a stock split doesn’t alter the financial fundamentals of a company, it does make each share more affordable. This often has a positive psychological impact on retail investors, making the stock appear more accessible. Nvidia’s statement highlighted that the split aims to make ownership “more accessible to employees and investors.”
Current and Post-Split Share Prices
Nvidia shares closed at $949.50 on Wednesday. With the 10-for-1 stock split, each share will be priced at approximately $94.95. Although an investor would need to purchase ten shares to maintain the same stake in the company, the lower price per share may attract a broader range of investors. Nvidia joins the ranks of other tech giants like Alphabet, Amazon, and Tesla, which all executed stock splits in 2022.
Market Reaction
Following the announcement, Nvidia shares surged nearly 4% in extended trading on Wednesday. The company also announced that each holder of Nvidia’s common stock will receive nine additional shares, distributed after market close on Friday, June 7. Trading on a split-adjusted basis will commence the following Monday.
A Historic Rally
Nvidia investors have enjoyed a remarkable rally over the past five years, with the stock price increasing 25-fold. Originally recognized as a leading manufacturer of advanced graphics processing units (GPUs) for video games, Nvidia has recently emerged as a key player in the artificial intelligence industry. Revenue in Nvidia’s fiscal first quarter skyrocketed by 262% compared to the same period last year, marking the third consecutive quarter with growth exceeding 200%.
Increased Dividend
In conjunction with the stock split, Nvidia announced an increase in its quarterly cash dividend from 4 cents per share to 10 cents on a pre-split basis. Post-split, this translates to a dividend of 1 cent per share.
For further details and updates, visit Nvidia’s Investor Relations page.
via CNBC
