On July 20th this year, NVIDIA’s stocks started trading with a 4-to-1 split in the Nasdaq; this move is expected to make the stocks accessible to a broader public of investors and those who don’t have access to fractional trading. However, it doesn’t mean an evolution in the company’s current status; since market cap and other fundamentals will remain unchanged.
The day before trading on a split, July 19th, the stock closed at $751,19 with a $468B market cap. The company had outstanding earnings last quarter when it reported year-over-year revenue growth of more than 88% and a profit margin of 33,77%. The share went to $835 before pulling back. So based on this data, is NVIDIA still a buy?
Since the stock price has given nearly a 5000% return over the past decade, and an investment of $10,000 10 years ago would mean about 500k today, it is easy to see why some investors would stay away from NVIDIA stock. However, the company is diversifying and continually developing new technologies and markets with success.
If we look further, we can see that the future looks very promising, which can justify the premium prices of Nvidia stock. Nvidia has business in gaming, cloud data centers, cryptocurrency, machine learning, artificial intelligence, electric vehicles, 5g, and even more. However, there is a risk to note here, Nvidia is attempting to acquire ARM holdings from SoftBank and is experiencing regulatory pushback. In any way, the rest of the company’s endeavors are looking promising for the future.
As mentioned earlier, you do not own more of Nvidia because of the 4 to 1 split. However, lower share prices may mean more movement for the stock because of the lower price, making NVIDIA an attractive long-term investment.
After the split, NVIDIA shares are trading at 194,41$ at the time of writing.
Do you plan to Invest in NVIDIA now that it is more accessible?
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