2 Artificial Intelligence (AI) Stocks on the Verge of a Stock Split

2 Artificial Intelligence (AI) Stocks on the Verge of a Stock Split

Many leading tech stocks have carried out stock splits in recent years, since Amazon has Alphabet, as their stocks soared. This move involves a company issuing additional shares to current holders in order to lower the price of each individual share. This doesn’t change the market value of the company or the value of your investment, but it is positive for the company because it makes the stock more accessible to a wider range of investors.

And for investors, a stock split often indicates that a company is doing well and that management expects the momentum to continue – which could, once again, send shares higher over time. time. It is therefore worth taking a close look at stock split companies, as some could make attractive long-term investments.

Companies that make excellent candidates for a split are often in a high-growth industry and have seen their shares rise quickly, even reaching the $1,000 mark. This is currently the case for two artificial intelligence (AI) stocks. They haven’t announced a split, but I wouldn’t be surprised if they do in the near future, thanks to their incredible performance over the past few years. Let’s take a closer look at these AI stocks that look ripe for a split.

2 Artificial Intelligence (AI) Stocks on the Verge of a Stock Split

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Nvidia (NASDAQ:NVDA) The stock has soared 500% over the past three years as the company has established its position as a global AI chip giant. The company sells graphics processing units (GPUs) that power the most crucial stages of any AI project: training and inference of AI models. This allows these models to do what we want them to do, like solve complex problems.

The tech giant’s GPUs were initially known for powering video games and graphics, but the introduction of the CUDA programming platform made it easier to use GPUs for general computing, opening the door to their use for AI. Now, instead of generating most of its revenue from the video game business, Nvidia generates it from the data center business. Last year saw revenues and profits soar by triple digits, and given that we are in the early days of the AI ​​boom, growth could continue.

Nvidia has split its shares five times in the past, with the most recent transaction occurring in 2021 after the stock went on a period of gains – and at that point, shares were trading under $250.

This year, Nvidia stock has climbed above $900, bringing it very close to the $1,000 level, which could deter some investors from buying the stock. This could be the perfect time for the launch of this AI star a stock split due to the current stock price and the fact that a new growth engine may be on the horizon. The company plans to launch its new Blackwell architecture and chips later this year, and the growth of this platform could boost Nvidia’s stock.

2. Super microcomputer

Super microcomputer (NASDAQ:SMCI) has skyrocketed, even surpassing Nvidia in sharing performance as of late. The stock has soared more than 2,200% over the past three years and topped $1,000 earlier this year before falling to the current level of around $940.

Like Nvidia, Supermicro has seen its source of revenue transform thanks to AI application. The 30-year-old company, maker of servers, hyperscale solutions and other equipment, recently reported its $3 billion first quarter as AI customers flocked to its products. Supermicro works closely with major chipmakers, including Nvidia, to be able to quickly integrate their products into its platforms, which has helped demand reach record highs. This also means that Supermicro benefits not only from its own new products, but also from new chip releases from all the major chip companies – from Nvidia to Intel And Advanced microsystems.

Customers also like Supermicro’s products because they are specifically tailored to their needs, and the company’s way of building its building blocks allows it to fulfill orders quickly.

Supermicro’s profits have soared recently and the company has taken steps to maximize its economies of scale to keep the times going strong. The tech giant is doing this by increasing production, with a new factory in Malaysia to focus on reducing costs and increasing volumes.

Supermicro has never split its shares, but now would be a great time to initiate such a move, given the current stock price and the potential for a new round of growth to come.

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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Adria Cimino has positions at Amazon. The Motley Fool holds positions and recommends Advanced Micro Devices, Alphabet, Amazon and Nvidia. The Motley Fool recommends Intel and recommends the following options: long January 2023 $57.50 calls on Intel, long January 2025 $45 calls on Intel, and short May 2024 $47 calls on Intel. The Mad Motley has a disclosure policy.

Stock Split Watch: 2 Artificial Intelligence (AI) Stocks That Look Ready for a Split was originally published by The Motley Fool

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