Investors are eager to find out how the 2024 NVDA stock split will affect their portfolios and the company’s future. One of the most innovative and potent tech companies, NVIDIA, has a significant influence on the stock market through its decisions. But what effects will this stock split have on investors? What would happen in 2025 if NVDA’s stock divided once more? If you’re curious about how these splits can affect your portfolio, this is the place to go.

This blog post will discuss the company’s explanations, potential impacts on stock value, and other facets of the NVDA stock split 2024. We will also discuss market trends and analyst forecasts for 2025 to help investors get ready for the future. By the end, you will be prepared for the upcoming years and know how the splits impact your investment strategy.

What Is a Stock Split?

In stock splits, current shareholders receive more shares. As such, it leads to the issuance of more shares at a reduced price. However, this has no bearing on the company’s market value or the amount owned by shareholders. For example, a 2-for-1 stock split would increase the number of shares while decreasing the price per share by giving one share to a shareholder who already owned another.

Why Is Stock Splitting Important for Investors?

There are several reasons why businesses might decide to divide their shares:

• Better Liquidity: A decline in the share price makes it simpler for more potential buyers to buy equities, which increases trading with better liquidity.
• Marketability: If the share price is reduced, the stock can become more alluring and affordable for small investors.
• Positive Market Perception: Management’s announcement of stock splits raises investors’ expectations regarding the company’s growth potential and shows that it has a bright future.
• Portfolio balancing: By allowing low-capital owners to buy additional units, a split raises the proportion of a successful business.
• Future Growth Potential: Companies with split stock are known to have excellent growth potential. Although there is no guarantee, recent evidence shows that equities do well after a split.

When did NVDA’s stock split?

On June 7, 2024, NVDA shares split 10 for 1. Consequently, the investor receives 10 more shares for each share they previously owned. Because of this division, more people were able to purchase the stocks for ten times less money. An investor’s total holding value remains unchanged even if they acquire more shares. It increased liquidity, drew in private investors, and demonstrated the company’s belief in its further expansion and prosperity. On June 10, 2024, the shares started trading at the revised price after the split.

The NVDA Stock Split’s History

Nvidia Corporation’s (NVDA) stock has previously split. June 7, 2024, was the most recent. On that day, Nvidia’s stock split 10 to one. For every share that the owners owned prior to the split, ten additional shares were awarded. The stock price thus plummeted tenfold, making it more accessible to a larger number of investors.

NVIDIA has split its shares six times since going public in 1999. Here is a summary:

History of the NVDA Stock Split:

It’s important to keep in mind that stock splits increase the number of shares accessible. However, they don’t affect the value of the investor. The value doesn’t change. The only variables that could alter are the quantity of shares and their respective values.

Will NVDA’s stock split in 2025?

Following the announcement of its most recent 10-for-1 split on June 7, 2024, NVDA has no plans to divide its stock again. Analysts believe that they will divide their stock in 2025, despite the lack of concrete news. A stock split is only possible when the stock increases sharply. The company may do this in 2025 in order to make the shares more affordable for investors. Additionally, the choice to split the company’s stock is influenced by its strategy, market conditions, and profitability.

How Does a Ten-for-One Stock Split Work?

In a 10-for-1 stock split, the firm gives each shareholder ten more shares for each share they already own. This is how it works:

• Raise in Shares: The corporation will raise the number of shares by offering 10 more to the market for every investor who now owns a share.
• Pricing Adjustment: The price of the divided shares decreases by ten if it had been worth ten dollars. The same stock would have been $10 following the split if it had been $100 prior.
• No Change in Total Value: The total of all the values remains constant. The overall value of the portfolio is unaffected by an increase in the number of shares. For example, if the stock split at $100, an investor who bought 10 shares for $100 would now own 100 shares. But following the split, each share would only be worth $10.

How Can NVDA Stock Splits Be Determined?

Modifying a stock split on NVIDIA (NVDA) would require adjusting the price per share and the number of shares by the split ratio multiplier. As mentioned below:

Calculate the Split Ratio: Let’s examine the 10-for-1 split as an example. Each old share is split into ten parts in this split.

Balance the Shares: You would double it by the number of split shares if you had a handful that happened to split at a 10-for-1 ratio. Imagine that before a 10-for-1 split, you had 100 shares. As a result of 100 x 10 =, you now possess 500.

Share Price Change:Divide the previous share price by the 10-for-1 split ratio to determine the change in share price. For example, the price of shares has dropped from $1,200 to $120.

It ensures that the quantity and amount per share increase but the actual value of the investment stays the same, even when the number of shares is increased. For instance, 1,000 shares at $120 and 100 shares at $1,200 both equal $120,000.

Is NVDA Stock a Good Time to Purchase After a Reverse Split?

On June 7, 2024, Nvidia Corporation recently split its stock 10 for 1. This split caused NVDA’s share price to fall from about $1,200 to about $120.

NVIDIA’s Previous Results After the Split

Historically, NVIDIA’s stock has had erratic performance after stock splits:

• 2000 Split: The stock had a 50% decline six months following the June 2000 split. It increased by 28% after a year. It then dropped by 52% during the next two years.
• 2001 Split: The stock increased 44% in the first half-year following the September 2001 split. But after two years, it dropped 72%, meaning it lost 49% during that time.
• 2006 split: Six months after the April 2006 split, the shares increased by 63%. However, it only increased by 1% in a year before declining by 6% two years later.
• 2007 Split: Six months following the September 2007 split, the shares dropped 45%. It decreased 70 percent in a year and 53 percent in two years. Six months after the split, in July 2021, the stock had risen 30%. Over two years, there was a 145% rise, yet there was a 4% decline in just one year.
• After a split, NVIDIA’s share usually increases by 8% six months later. However, it fell 23 percent in the first year and 3 percent over the next two years.

Stock Performance Upon Split

The stock of NVIDIA has grown exponentially after the separation. On December 30, 2024, the stock’s value was $137.49, 13.7% higher than its post-split value. Comparable momentum is seen in politically related tech stocks, according to data from the Nancy Pelosi Stock Tracker. This is in line with historical patterns that indicate split stocks usually generate an 18% return within a year after their announcement. This correlation shows how legislative insights and market trends are increasingly coinciding, giving investors two viewpoints to evaluate growth potential and volatility.

The price goals and analyst ratings

Analysts’ perceptions of NVDA remain positive. Based on 43 analyst recommendations, the consensus rating is “Moderate Buy,” with 40 recommending a buy and three recommending a hold. A potential 29% gain over the current price is indicated by the average 12-month price target of $177.08.

Earnings

In the first quarter of fiscal 2025, Nvidia announced a solid quarterly revenue of $26.0 billion, up 18% from the previous quarter and an impressive 262% year-over-year. Revenues were expected to exceed $22.6 billion for its Data Centre sector, a remarkable 427% year-over-year rise and 23% more than the previous quarter.

Some Considerations for Future Investors

Although stock splits can increase investor liquidity, they do not increase the company’s worth. The following should be considered when purchasing NVDA Stock Split:

• Company Fundamentals: Investors should now take into account NVIDIA’s entire market position, growth potential, and financial stability rather than the share price’s face value.
• Market Volatility: Following a split, the share price may fluctuate based on the condition of the market. The split has no bearing on the market capitalisation of the business or the investment’s inherent value. As a result, investors should prepare for possible short-term price fluctuations.
• Payout Adjustments: Variations in the split ratio will have an impact on the payout per share when it comes to dividends. For example, NVIDIA recently raised its quarterly cash dividends from $0.04 to $0.10 (pre-split), or $0.01 per share after the split.
• Tax Implications: Even though stock splits are tax-free, it’s still a good idea to speak with a tax expert.
• Technical Indicators: To monitor the stock price, use significant technical levels, such as the 50-day moving average.

To sum up

In conclusion, after the successful 10-for-1 NVDA stock split in June 2024, investors may find the anticipated 2025 split thrilling. Increasing accessibility to Nvidia’s stock has previously improved liquidity and piqued investor interest. Although a 2025 split has not been formally declared, analysts think it may happen given the company’s growth and stock price trends.

Although they attract more retail investors and project confidence, NVDAs and other stock splits don’t always boost a company’s value. Nvidia’s strong post-split performance and dominant position in the semiconductor and AI industries suggest that future splits may have a positive impact on stock liquidity and investor sentiment. Prospective investors should always consider the current status of the market before making a decision.

FAQs

How did the 2024 NVDA stock split proceed?

In June 2024, NVIDIA announced a 10-for-1 stock split, promising to offer nine additional shares to each shareholder who receives one share. It reduced the price per share and made the stock more affordable for all investors and employees.

Has NVIDIA announced a stock split for 2025?

Regarding the 2025 NVDA stock split, NVIDIA has not yet released an official statement. Despite the lack of a written plan, analysts and investors make assumptions.

What effect does a split have on a stock’s price?

When stocks are split, the share price decreases correspondingly. Individual investors can trade equities more easily and at a lower cost as a result. The market worth of the business as a whole and the value of your shares are unaffected, though.

Will NVDA’s stock fare better following a stock split?

Performance does not always better when stocks are split. However, over the long term, NVIDIA’s prior stock splits have followed steady increasing trajectories. Consequently, previous splits have raised investor interest and liquidity, but the results are uncertain.

How can I participate in the NVDA stock split if I’m not a shareholder?

If you were a record holder of Nvidia shares on the designated day, you would be qualified for an NVDA stock split. To be eligible for the split, you can buy NVDA equities through a broking account up until the record date if you don’t currently own any.