Nvidia (NASDAQ:NVDA) shares began trading on a new 10-for-1 split basis on Monday, adjusting the stock from its Friday closing price of $1,208.88 to $120.88. The stock rose just under 1% by late Monday morning.
As part of the split, shareholders received 10 shares for each share they held as of Thursday’s market close. For example, a shareholder with four shares now owns 40 shares post-split. Stock splits lower the price of individual shares, making them more affordable without diluting the value of existing shareholders’ total holdings.
“The stock split is going to make Nvidia a lot more reachable for retail traders,” said Matt Amberson from Option Research & Technology Services, adding that options traders are looking forward to the split due to high options prices.
Nvidia’s total market valuation briefly surpassed $3 trillion last Wednesday, pushing it past Apple (NASDAQ:AAPL) to become the second-most valuable publicly traded U.S. company. Shares of Nvidia have surged due to the rising interest in generative AI, which accelerated when OpenAI debuted ChatGPT in late 2022. Major companies like Amazon (NASDAQ:AMZN), Google (NASDAQ:GOOG,NASDAQ:GOOGL), and Microsoft (NASDAQ:MSFT) are competing for Nvidia’s hardware to power their AI platforms.
Nvidia’s first-quarter revenue reached $26 billion, with adjusted earnings per share of $6.12, marking increases of 262% and 461%, respectively, from the same period a year ago. Data Center revenue grew 427% year-over-year to $22.6 billion, making up 86% of total revenue. The gaming segment, previously Nvidia’s most important business, reported $2.6 billion in revenue.
CEO Jensen Huang announced new hardware developments, including the Blackwell Ultra AI platform set for 2025 and the Rubin platform expected in 2026, with an Ultra version of Rubin planned for 2027.
Historically, companies that announce stock splits tend to outperform the S&P 500. Bank of America analysis shows stocks rise an average of 25% in the 12 months following a split announcement, compared to the S&P 500’s average return of 12%. Since Nvidia announced its split on May 22, shares have increased by about 27%.
Nvidia’s competitors, AMD (NASDAQ:AMD) and Intel (NASDAQ:INTC), are developing their own AI hardware and product roadmaps as alternatives to Nvidia. Additionally, customers like Meta (NASDAQ:META) and Tesla (NASDAQ:TSLA) are seeking Nvidia’s chips for various AI applications.
Nvidia’s growing total addressable market extends beyond tech companies to include government organizations and research institutions, indicating significant potential for future growth.
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