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On Sun, 22 Sept, 4:01 PM UTC
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2 Stock-Split Stocks to Buy Before 2025 | The Motley Fool
Companies that split their stocks are usually experiencing phenomenal growth that has sent their share price soaring. It's not uncommon to see a fast-growing company issue multiple stock splits over several years. For example, leading chip supplier Nvidia (NVDA -1.59%) has split its stock six times in the last 25 years, with two since 2021. The most common type of split is a forward stock split in which the goal of the company is to make its share price more affordable for investors. Keep in mind, a stock split gives you more shares, but the share price is also reduced so that the value of your investment remains the same after the split. Stock splits alone are not a good reason to invest in a company. It still comes down to looking at a company's growth and future opportunities. If the stock is trading at a reasonable price relative to that growth, you've got a winner on your hands. Here are two growth stocks that recently issued a 10-for-1 split you can buy today with less than $200. Nvidia has been one of the best-performing stocks over the last 10 years. The shares are up 24,000% since 2014. The company has split its stock twice in the last five years: a 4-for-1 split in 2021 followed by a 10-for-1 split in June of this year, bringing its share price to a more affordable $118. The stock has been choppy over the last month as investors focus on near-term hurdles to growth. Nvidia is launching its Blackwell GPU architecture later than Wall Street expected. Nvidia is also dealing with export restrictions and increasing competition in China, although its China business grew sequentially last quarter. Some of Nvidia's largest customers in the U.S. are making their own chips for artificial intelligence (AI) workloads, including Amazon Web Services (AWS). There is growing demand for alternatives since Nvidia's graphics processing units (GPUs) have been in short supply and command high selling prices. Despite these risks, Nvidia's revenue grew 122% year over year in the fiscal second quarter. There is currently no replacement for the general-purpose computing power of Nvidia's GPUs. This is why Amazon and other cloud service providers are expected to adopt Blackwell next year, which can run large language models (LLMs) significantly faster and at lower cost than previous-generation chips. Nvidia expects fiscal Q3 revenue to be up approximately 79% over the year-ago quarter. Management sees the enterprise AI wave gaining momentum across various industries, and this should lead to strong demand for Blackwell starting in fiscal Q4. Analysts currently expect Nvidia's earnings to increase 40% to $3.99 next year. Assuming Nvidia stock is trading at the same price-to-earnings (P/E) ratio, the stock could reach $200 by the end of 2025, representing an upside of 69%. Broadcom (AVGO 2.20%) is another chip stock that has delivered exceptional returns to investors in recent years. This leading supplier of networking and software solutions for data centers issued a 10-for-1 forward split on July 15, bringing its share price down to $167. Broadcom is well-positioned for long-term growth in the AI market. It started investing in AI around 10 years ago, and it's paying off. In Q2, revenue from custom AI accelerators grew over threefold compared to the year-ago quarter. Another catalyst that should benefit the stock is Broadcom's smartphone business. It has been a key component supplier for Apple. As part of Apple's commitment to invest $430 billion in the U.S. economy over the next five years, it made a long-term deal with Broadcom in 2023 to supply wireless connectivity and other components for Apple devices. Broadcom could see modest upside from Apple's iPhone 16 over the next year. Apple is expected to experience strong demand for its new iPhones, given that customers with older phones will need to upgrade to take advantage of new AI features coming to iOS. Broadcom expects 20% sequential growth in wireless revenue in Q4. Analysts are high on Broadcom right now, since some of the risks to the business have already materialized, such as the recent sluggishness in smartphone sales. Plus, it's got great exposure to the growth in AI infrastructure, which bodes well for its long-term prospects. The stock is trading at a forward P/E of 27 on next year's earnings estimate, and analysts expect the company to post annualized earnings growth of 19% over the long term. The stock should deliver excellent returns for years to come.
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Stock-Split Watch: 2 AI Stocks That Look Ready to Split | The Motley Fool
Several AI stocks have already announced stock splits. These two could join them. Artificial intelligence (AI) stocks have led the current bull market, so it shouldn't come as a surprise that there have already been several stock splits among AI stocks. Nvidia and Broadcom, two of the biggest chip stocks, have already done 10-for-1 stock splits in recent months. Super Micro Computer, a maker of AI servers, is set for its own 10-for-1 stock split to go into effect on Oct. 1. Lam Research has also announced a 10-for-1 split set to go into effect on Oct. 2. However, with plenty of other AI stocks soaring, a number of candidates in the sector appear ready to split their stocks. While a stock split doesn't change a stock's fundamentals, investors generally cheer such moves as they act as a reset in the share price, giving the stock another chance to soar. There's also some evidence that stocks outperform in the year after the split, perhaps because stocks tend to split when management believes they have the momentum to keep gaining. Keep reading to see two AI stocks that could split their shares in the near future. ASML (ASML -3.97%) is the leading maker of lithography equipment, the complex machines used to make semiconductors. ASML supplies companies like Taiwan Semiconductor Manufacturing Company, Samsung, and Intel, and it's the only maker of extreme ultraviolet (EUV) machines used to make the most advanced chips. ASML's leadership position in a crucial category of the semiconductor industry has given it a market cap of more than $300 billion and a share price hovering around $800 a share. That makes the company eligible for a range of stock splits as it already has one of the highest individual share prices of any stock on the market. ASML has split its stock in the past, but it hasn't had a traditional stock split since 2000, when it executed a 3-for-1 split. In 2007, it enacted an 8-for-9 reverse split in combination with a special dividend, and it performed a synthetic buyback in 2012, along with a 77-for-100 reverse stock split. If the stock continues to gain, which seems like a good bet given the growth in AI, a stock split seems likely. Equinix (EQIX 0.71%) isn't your typical AI stock. The company is a real estate investment trust (REIT) and the world's largest data center REIT, giving investors exposure to the AI boom from another angle. As a REIT, its growth rates tend to be modest, but the company still has a huge growth opportunity in front of it, especially with the boom in data centers from AI. Revenue in the second quarter was up 7% to $2.2 billion, and it posted its first-ever quarter of better than $1 billion in earnings before interest, taxes, depreciation, and amortization (EBITDA) at $1.04 billion. Equinix is rapidly expanding its property base, with 54 major projects underway. The company also bought a more than 200-acre parcel of land in the Atlanta area, which it said will help it "pursue larger AI and hyperscale workloads in the U.S." Equinix looks like a good candidate for a stock split as the stock is now trading at a share price of around $860. Equinix has never had a stock split but did a reverse stock split in 2002, from $1 to $32, after the value of the stock plunged when the dot-com bubble burst. The data center REIT hasn't made the kind of gains that other AI stocks have recently, so a stock split might not be as urgent. However, with the stock approaching a $1,000 share price, splitting the stock could make it more attractive to retail and beginning investors, many of whom are eager to buy AI stocks.
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As the AI boom continues, tech giants Nvidia and Palantir are showing signs of potential stock splits. Investors are eyeing these companies for their strong market positions and growth potential in the AI sector.
In the rapidly evolving landscape of artificial intelligence (AI), two companies are drawing significant attention from investors and market analysts alike: Nvidia and Palantir Technologies. Both firms are not only at the forefront of AI innovation but are also showing signs that they may be ready for stock splits in the near future 1.
Nvidia, the graphics processing unit (GPU) manufacturer turned AI powerhouse, has seen its stock price soar to unprecedented heights. The company's market capitalization has surged past $1 trillion, making it one of the most valuable companies in the world 1. This remarkable growth is largely attributed to Nvidia's dominant position in supplying chips crucial for AI and machine learning applications.
With its stock price hovering around $500, Nvidia is well-positioned for a potential stock split. The company has a history of such moves, having executed a 4-for-1 split in July 2021 when its shares were trading at similar levels 1. A stock split could make Nvidia's shares more accessible to retail investors and potentially increase liquidity.
Palantir Technologies, known for its sophisticated data analytics platforms, has been making waves in the AI sector. The company's stock has experienced significant growth, driven by increasing demand for its AI-powered solutions across various industries 2.
While Palantir's stock price is not as high as Nvidia's, the company's rapid expansion and growing market presence make it a prime candidate for a stock split. Such a move could enhance the stock's appeal to a broader range of investors and potentially boost trading volume 2.
The surge in interest for both Nvidia and Palantir is largely fueled by the ongoing AI boom. As businesses across sectors rush to integrate AI capabilities, the demand for advanced chips and data analytics solutions has skyrocketed 12.
Nvidia's GPUs have become the de facto standard for training large language models and other AI applications, cementing its position as a key player in the AI revolution 1. Meanwhile, Palantir's AI-enhanced platforms are finding increasing adoption in both government and commercial sectors, driving the company's revenue growth 2.
If Nvidia and Palantir proceed with stock splits, it could have several implications for investors:
However, it's crucial to note that stock splits do not inherently change a company's fundamental value or market capitalization. They simply divide the existing value into a larger number of shares.
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Recent stock splits by tech giants Nvidia and Amazon have caught the eye of investors. While some billionaires are selling Nvidia, others are buying into Amazon's potential in the AI market.
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ASML Holding, a key player in AI chip production, is seen as a potential stock split candidate. Despite recent challenges, the company's crucial role in the semiconductor industry and its growth prospects make it an attractive investment option.
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As the AI market evolves, investors are looking beyond industry leader Nvidia for potential high-growth opportunities. Several AI-focused companies are gaining attention for their impressive performance and future prospects.
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Meta Platforms and Microsoft, two AI industry leaders, are showing strong potential for stock splits in 2025 due to their soaring share prices and continued growth in AI investments and innovations.
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Recent stock splits have caught investors' attention, with companies like Nvidia seeing significant gains. This article explores recent stock splits, potential candidates, and how some split stocks might outperform market leaders in the coming years.
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