AI Giants Poised for Stock Splits: Nvidia and Palantir in Focus

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.

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.