If you wanted to buy Nvidia at a cheaper price, now you have the opportunity. The tech giant conducted a 10-to-1 survey stock split after the market close on June 7, 2024. Nvidia’s stock price is at its lowest level in years.
Which AI leaders could experience monster stock splits after Nvidia? Here are two top candidates and a definitive choice.
1. Broadcom
In a sense, Broadcom (NASDAQ:AVGO) has never split its stock. Avago acquired the “old” Broadcom in 2016 and kept its name. The “old” Broadcom had carried out three stock splits before being purchased. However, Avago never split its shares – and neither did the “new” Broadcom.
Broadcom’s stock price is currently hovering around $1,440. That’s well above Nvidia’s stock price when its shares were split. Although the company’s management team has not yet hinted at a stock split, the timing could be good for such a split – perhaps a 10-for-1 split, like what Nvidia did.
Broadcom’s networking products enjoy strong demand in AI data centers. However, the company is not resting on its laurels. It recently announced a new line of Ethernet adapters specifically designed for AI infrastructure. Broadcom believes its latest product launch is “revolutionizing the AI networking landscape.”
2. ASML management
ASML Holding (NASDAQ: ASML) has carried out five stock splits in its history. This number includes two consolidation of sharesone in September 2007 and another in November 2012.
There is good reason to believe that another conventional stock split is planned. ASML’s stock price is above $1,040 and has remained above $800 so far through most of 2024. However, the company has given no indication that a stock split would be in preparation.
ASML is the only manufacturer of extreme ultraviolet (EUV) lithography machines used to manufacture the most advanced chips. How important is this advantage? Goldman Sachs believes that chips made using EUV “will enable the next wave of AI.”
3. Lam Research
Search Lam (NASDAQ: LRCX) had two stock splits. However, the most recent – a 3:1 split – dates back to March 2000.
Unlike Broadcom and ASML, Lam definitely has a stock split in the works. Last month, the company announced a 10-for-1 stock split planned after the market close on October 2, 2024. This split makes perfect sense given that Lam’s stock is trading above 1,000 $.
Lam is a leading supplier of wafer manufacturing equipment used in semiconductor manufacturing. The AI advantage of AI is in storage. AI applications require fast, high-density storage. Lam’s technology enables enterprise SSDs to be 50 times faster and up to five times more energy efficient than hard drives, which currently store more than 80% of enterprise data.
Are these potential stock split candidates buyers?
I wouldn’t buy any of these stocks solely because of their planned (for Lam Research) and possible (for Broadcom and ASML) future stock splits. Stock splits have no effect on the underlying businesses or growth prospects of the companies.
That said, I think these three stocks could generate fantastic gains in the long term, as AI continues to drive demand for high-power chips and the equipment required to make those chips. Broadcom, ASML and Lam Research are expected to remain at the forefront of the AI chip market.
Certainly, all three of these stocks are trading at premium valuations. They may be more volatile than most stocks. However, Broadcom, ASML, and Lam should be good picks for aggressive growth investors.
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Keith Speights has no position in any of the stocks mentioned. The Motley Fool holds positions and recommends ASML, Goldman Sachs Group, Lam Research and Nvidia. The Motley Fool recommends Broadcom. The Motley Fool has a disclosure policy.
These could be the next Monster AI stock splits after Nvidia was originally published by The Motley Fool
