NVDA Stock Split: What Investors Need to Know? (Jan 2025)

Investors are eager to know how the NVDA stock split 2024 will affect their portfolios and the company’s future. As one of the most innovative and influential tech companies, NVIDIA’s decisions significantly moved the stock market. But what does this stock split mean for investors? And what can you expect if there’s another NVDA stock split in 2025?  If you are curious about how these splits will affect your portfolio, this is the place to be

This blog post will cover every aspect of the NVDA stock split 2024, including the company’s reasons, potential impacts on stock value, and other factors. We will also highlight the market trends and predictions from analysts about 2025 to help investors position themselves for the future. By the end, you will know how the splits impact your investing strategy, so you will be prepared for what is ahead in the coming years.

What Is a Stock Split?

In stock splits, current shareholders receive additional shares. As a result, it leads to issuing more shares at a reduced price. However, this does not affect the amount held by shareholders or the company’s market value. For example, a person owning one share would be awarded another share during a 2-for-1 stock split, reducing the price per share while increasing the number of shares.

Why do Stock Splits Matter For Investors?

There are several reasons why companies may decide to undertake stock splits:

• Enhanced Liquidity: The share price is reduced, thus reducing the barrier for more potential investors to access equities and, therefore, increasing trading with better liquidity.
• Marketability: A reduced share price for small investors might make the Stock more appealing and accessible.
• Positive Market Perception: When the management announces stock splits, it shows the company’s bright future and simultaneously raises the investors’ hopes about its growth potential.
• Portfolio Balancing: A split allows low-capital owners to buy additional units to increase the proportion of a successful firm.
• Potential for Future Growth: Split stock companies are known to have good growth potential. Although there is no promise, recent statistics show that stocks do well after a split.

When did NVDA Stock Split?

On June 7, 2024, NVDA shares split 10-for-1. Thus, the investor gets ten new shares for each share they previously owned. As a result of this split, more investors could purchase the stocks for ten times less money. An investor’s total holding value will remain unchanged even when more shares are owned. It increased liquidity, drew in individual investors, and demonstrated the company’s confidence in its future success and ongoing expansion. On June 10, 2024, the shares started trading at the revised price following the split.

NVDA Stock Split History

Nvidia Corporation (NVDA) has a history of splits in NVDA stock. The latest occurred on June 7, 2024. On that date, Nvidia conducted a 10-for-1 stock split. For every share the shareholders possessed before the split, they received ten new ones. A consequence was that it reduced the stock price tenfold, thus making it more accessible to an increased degree for many investors.

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

Historical NVDA Stock Split:

Date	Split Ratio
June 27, 2000	2-for-1 split
September 17, 2001	2-for-1 split
April 7, 2006	2-for-1 split
September 11, 2007	3-for-2 split
July 20, 2021	4-for-1 split
June 7, 2024	10-for-1 split

It’s important to note that Stock splits increase the availability of shares. However, they do not affect the value owned by the investor. The value stays the same. Only the quantity of shares and the Amount of money each share changes.

Will NVDA Stock Split in 2025?

After the recent 10-for-1 stock split announced on June 7, 2024, NVDA doesn’t plan a subsequent one. Analysts say they would have a split stock in 2025, but no news is confirmed. The stock split might occur only when the Stock rises sharply. The company may do this in 2025 to make the stock price affordable for investors. Moreover, the stock split decision also depends on the company’s performance, market conditions, and strategy.

How Does a 10-for-1 Stock Split Work?

In a 10-for-1 stock split, each shareholder receives ten new shares from the company in return for each share they own. Here’s how it operates:

1. Growth in Shares: Every time an investor owns a share, the corporation issues 10 additional shares into the market; hence, this rise will boost the share Amount.
2. Price Adjustment: When worth $10, if it had been worth Stock is split, its price decreases by ten. After the split, the same stock would have been $10 if it had been $100 beforehand.
3. No Change in Total Value: The collective value remains the same. Increasing the number of shares does not affect the portfolio’s overall value. For example, after a stock split at $100, an investor buying 10 shares at $100 would now own 100 shares; however, every share would be worth only $10 post-split.

How to Calculate NVDA Stock Splits?

Adjusting a stock split on NVIDIA (NVDA) would require changing the price per share and the number of shares by the split ratio multiplier. As follows:

1. Identify the Split Ratio: Let’s take, for instance, the 10-for-1 split. This split means that you divide each old share into ten.
2. Balance the Number of Shares: If you had a few shares, and it happened to split at 10-for-1, then you’d multiply that by the number in which it was divided. Let’s say you had 100 shares before a 10-for-1 split. Because 100 times 10 =, you now have 1,000. 
3. Share Price Change: Divide the previous share price by the ratio for a 10-for-1 split. For example, the cost of shares went from $1,200 earlier to $120 now.

It ensures that, though the shares are increased, both the quantity and Amount per share go up while the actual worth of the investment stays the same. For instance, 100 shares for $1,200 is equivalent to $120,000, the same as 1,000 shares at $120.

Is NVDA Stock a Buy After Reverse Split?

On June 7, 2024, Nvidia Corporation recently conducted a 10-for-1 stock split. This NVDA stock split diminished the share price from nearly $1,200 per share to about $120 in share price.

Historical Performance of NVIDIA Post-Split

Historically, NVIDIA’s Stock has shown mixed results after Stock splits:

• 2000 Split: The Stock declined by 50% six months after the June 2000 split. It increased by 28% a year later. Then, it dropped 52% over the next two years.
• 2001 Split: The Stock increased 44% in the first half-year following the split in September 2001. But it dropped 72% after two years, meaning it lost 49% in just two years.
• 2006 Split: Six months after the April 2006 split, the Stock increased 63%. However, it only increased by 1% in a year; two years later, it fell by 6%.
• 2007 Split: Six months after the split in September 2007, the Stock dropped 45%. It dropped 70% in one year and fell 53% over two years.
• 2021 Split: Six months after the split in July 2021, the Stock went up by 30%. The decline was 4% in one year, but the gain over two years was 145%.

On average, NVIDIA’s share increases 8 percent six months after going for a split. However, it fell 23 percent in the first year and down 3 percent over two years.

Stock Performance Post-Split

After the split, NVIDIA’s stocks have grown exponentially. On December 30, 2024, the Stock stood at $137.49, a 13.7% rise from its post-split value. It is in line with history. Split stocks have seen an average of about 18% return within the 12 months after the split was announced.

Analyst Ratings and Price Targets

Analyst sentiment toward NVDA remains positive. Based on 43 analyst ratings, the consensus rating is “Moderate Buy,” with 40 recommending a buy and 3 recommending a hold. The average 12-month price target is $177.08, suggesting a potential upside of approximately 29% from the current price. 

Financial Performance

In the first quarter of fiscal 2025, Nvidia announced a substantial quarterly revenue of $26.0 billion, 18% higher than the previous quarter and an incredible 262% rise year over year. Revenues were estimated at $22.6 billion for its Data Center division, which is 23% higher than the prior quarter and a remarkable 427% rise year over year.

Considerations for Future Investors

Though Stock splits create liquidity and can make shares more liquid for investors, they do not increase the company’s value. When purchasing NVDA Stock Split, keep in mind the following points:

• Company Fundamentals: Investors at this stage should look towards the financial stability, growth expectations, and general market position for NVIDIA rather than the face-value share price.
• Market Fluctuations: The post-split share price can fluctuate with market conditions. The split does not alter the company’s market capitalization or the investment’s intrinsic value. Thus, investors should expect possible short-run price fluctuations.
• Dividend Adjustments: In the case of dividends, the dividend per share will also change due to alteration in the split ratio. For example, NVIDIA recently lifted its quarterly cash dividends from $0.04 to $0.10 (pre-split), or $0.01 a share after the split.
• Tax Implications: Stock splits are tax-free, although one should always ask a tax expert for advice.
• Technical Indicators: Follow the Stock’s price with key technical levels, such as the 50-day moving average.

Conclusion

In conclusion, after the successful 10-for-1 NVDA stock split in June 2024, investors may find the proposed 2025 split stimulating. Making Nvidia’s shares more accessible has historically raised investor interest and enhanced liquidity. Although the firm has not formally declared a 2025 split, analysts think it may happen given the company’s development and stock price trends.

Stock splits like NVDAs don’t inherently add value to a company; they express confidence and attract more retail investors. Nvidia’s strong post-split performance and dominant position in the AI and semiconductor industries suggest that future splits could positively impact stock liquidity and investor sentiment. However, potential investors should always consider broader market conditions before making decisions.

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