• Nvidia announced a 10-for-1 stock split
• The company’s share price has soared 25-fold in the past five years due to the AI boom
• Nvidia is increasing its quarterly cash dividend from $0.04 per share to $0.10 per share on a pre-split basis
Nvidia announced a 10-for-1 stock split on Wednesday alongside its quarterly earnings report. The split comes after the company’s share price has soared 25-fold over the past five years.
Nvidia Following Other Tech Companies With Stock Split
The stock split will make Nvidia’s shares more accessible and affordable to retail investors. With a 10-for-1 split, each share would cost around $95 based on the current $950 price, though investors would have to buy 10 shares to own the same amount of the company.
Alphabet, Amazon and Tesla all instituted stock splits in 2022 as their share prices climbed. Stock splits do not change a company’s fundamentals but can have a positive psychological impact on investors.
Historic Rally in Nvidia Share Price
Nvidia has enjoyed a meteoric rise over the past five years, with its stock price increasing 25 times over. The company was long known primarily for its graphics chips for video games. But it has emerged as a central player in the artificial intelligence boom more recently.
Nvidia’s revenue in its latest quarter soared 262% from a year earlier, marking the third straight quarter of growth above 200%.
Increasing Dividend Payment
Along with the stock split, Nvidia said it is increasing its quarterly dividend payment from 4 cents per share to 10 cents pre-split. After the split takes effect, the dividend will be 1 cent per share.
Conclusion
The stock split caps off a hugely successful period for Nvidia, which has ridden the AI wave to become one of the market’s hottest stocks. While the split itself does not alter the company’s fundamentals, it could give more investors a chance to buy shares of the high-flying chipmaker.
