NVIDIA’s recent 10-for-1 stock split announcement and its subsequent 9.3% stock price increase have set the stage for speculation about which companies might follow suit. The trend of stock splits among major tech companies like Amazon, Alphabet, and Apple (NASDAQ:AAPL) has shown positive market reactions, leading many to anticipate more announcements of this kind in the near future. This anticipation is particularly relevant for companies trading at high share prices, as stock splits can make these shares more accessible to retail investors, thereby increasing market interest and liquidity.
NVIDIA’s previous stock split in 2007 resulted in a significant uptick in share price, echoing the recent market response. Similarly, Amazon’s 2022 20-for-1 split and Alphabet’s 20-for-1 split both led to immediate stock price increases, by 5% and 8% respectively. These historical data points underscore a pattern of positive market reception to stock splits in the tech sector, suggesting that other high-value companies might consider stock splits to maintain investor interest and stock accessibility.
Potential Candidates for Split
Microsoft (NASDAQ:MSFT) is a prime candidate for a stock split, with shares currently trading around $430 and a market cap of $3.2 trillion. The company has a history of 2-for-1 splits, although it has been over two decades since the last one. A split could reduce share prices to a more attainable range for retail investors, which might enhance trading volume and interest.
Broadcom and Super Micro Computer
Broadcom, trading at approximately $1,400 per share, is another likely candidate. With the company actively competing with NVIDIA in areas such as accelerators and networking, a stock split could draw more attention from investors. This move might also increase share accessibility for retail traders, potentially boosting market engagement.
Super Micro Computer has seen its share price hover between $800 and $900 recently, driven by positive trends in AI and a strong retail following. Considering its elevated stock price and the benefits observed from past tech stock splits, management might find a split advantageous in maintaining investor momentum.
Market Implications
- Microsoft could see increased trading volume post-split.
- Broadcom might leverage a split to boost investor attention.
- Super Micro Computer’s split could enhance its retail investor base.
Notably, stock splits do not alter the intrinsic value of a company; they simply divide existing shares into more units, making them more affordable. This affordability often spurs market activity and can act as a catalyst for stock performance. Given the historical success of stock splits in the tech industry, companies like Microsoft, Broadcom, and Super Micro Computer may strategically consider this path to sustain investor interest. Monitoring these companies for split announcements could provide valuable investment opportunities, aligning with current market trends and accessibility goals.
