Nvidia's split of soaring stock could boost retail investor appeal, Dow chances
Nvidia's plan to split its stock after the stunning rise in the chipmaker's share price could lure more interest from retail investors while potentially paving the way for the company's inclusion in the Dow Jones Industrial Average.
Nvidia shares were soaring 10% on Thursday afternoon after the company announced a 10-for-one stock split as part of a blockbuster quarterly report included its revenue and forecast coming in above analyst estimates.
Nvidia, which has become the poster child of investor enthusiasm for artificial intelligence, is the latest U.S. megacap company to unveil a stock split in recent years, including Amazon.com, Alphabet and Tesla. Nvidia itself executed a four-for-one split in mid 2021.
For Nvidia, the third-largest U.S. company by market value, the stock split could spark more interest from individual or retail investors, analysts said. The chipmaker's shares have already more than doubled so far in 2024.
Although a split alone does not change a stock's valuation, market analysts said the lowered per-share value of the stock woos individual investors, who tend to trade in smaller lots due to their limited funds in comparison to institutional investors, who have deeper pockets.
«The stock split is probably the biggest catalyst to keep attracting retail flows,» said Marco Iachini, senior vice president at Vanda Research.
Nvidia's lead in the AI boom already has made it the most popular stock among individual investors over the past year.
The stock is the highest weight in the average
