Will NVIDIA bring a new era of stock splits to US stocks? Who will be the next key to wealth
Bank of America (BofA) and NVIDIA's stock splitThe possibility of triggering a stock split boom in the US stock marketThere is, I'm watching. BofA has a stock split”A sign of ability” and pointed out that companies that have carried out stock splits tend to raise strong returns over the next year. According to the data,Companies that announce stock splits usually outperform the market. Who will be the next key to wealth?
$NVIDIA(NVDA.US$Along with the announcement of financial results, a stock split was announced to divide 1 share into 10 shares to be implemented on 6/7. The company says that this stock split will make it easier for employees and investors to buy shares. The last time NVIDIA implemented a stock split was in 2021, and at that time, 1 share was split into 4 shares. What was the stock price when the plan was announcedabout $600It was, but it was the best before the effective date$835It has been reached. After the stock split, what is NVIDIA stock nowUp more than 450%Doing it.
In its report, BofA focuses on 36 companies whose stock prices exceed 500 dollars among the S&P 500 constituent stocks. These are stocks that have high stock prices and may be candidates for stock splits. particularly $Broadcom(AVGO.US$、 $Netflix(NFLX.US$、 $Advanced Micro Devices(AMD.US$、 $ServiceNow(NOW.US$Expensive high-tech stocks such asThe center of candidates for the next stock splitI think it could happen. Other major online travel companies whose stock price is approaching about 3800 dollars $Booking Holdings(BKNG.US$, the stock price is 3000 dollars or more $Chipotle Mexican Grill(CMG.US$with $AutoZone(AZO.US$、 $Eli Lilly and Co(LLY.US$、 $Regeneron Pharmaceuticals(REGN.US$Pharmaceutical companies such as are also included.
Also, Microsoft and Meta, the US stock “M7,” are approaching the 500 dollar club. There is also a high possibility that the next stock split will be one of these leading candidates.
A stock split indicates that an enterprise divides existing expensive shares into a plurality of low-priced shares, thereby increasing the number of issued shares. After the stock split, shareholders' capital did not change, and the total market value of the company did not change, but the number of shares held changed. Stock splits do not change the total market value of a company,Companies continue to expand their business, and earnings forecasts are goodSo,It is often done when investors have a very high level of trust in a company's stock price. Stock prices will drop after the split, and more individual investors will gather,Companies with good fundamentals tend to see short-term increases in stock prices after a split。
BofA sees stock splits as “an expression of ability,” and companies that have carried out stock splitsThe trend of increasing strong returns over the next yearI pointed out that there is one. According to the data,Companies that announce stock splits usually outperform the marketIt shows. According to an analysis published by the Bank of America Global Research Center in February, the stock prices of the S&P 500 constituent stocks that announced stock splits after 1980Significantly outperformed the same index 3 months, 6 months, and 12 months after the announcementYes, and the average stock price is 12 months25.4%Whereas it rose, the S&P 500 index was in the same period11.9%It only continued to rise.
Stock splits can also result in excess returns,That's not always the case. For instance, $Tesla(TSLA.US$After dividing 1 share into 3 shares on 2022/8/25,A cumulative decline of about 40%Therefore, a sustainable rise after the stock split is uncertain. On the other hand, when Tesla split 1 share into 5 shares on 2020/8/31 at an earlier time, thenStock prices have risen more than 150% in just over a yearI did it.
Also, what are the more influential cases $Apple(AAPL.US$So, after dividing 1 share into 7 shares in 2014/6, the stock price fell from over 600 dollars to over 90 dollars, and thenA bull market that soars nearly 5 timeshas started. Apple's stock price when 1 share was split into 4 shares on 2020/8/31 did not show as much increase as last time, over 1 yearAn increase of approximately 30%It stayed at.
others, $Alphabet-A(GOOGL.US$After the split of 20 shares per share on 2022/7/18,Cumulative increase of approximately 60%I did it. $Amazon(AMZN.US$After announcing a stock split of 20 shares per share on 2022/3/9 and the loss of rights on 2022/6/6,A cumulative increase of approximately 50%I showed it.
According to Howard Silverblatt, senior index analyst at S&P Dow Jones Indices, since 2020, S&P 500 companies have carried out 31 stock splits, which is well below the level of the early 2000s and the end of the 1990s.
In the case of NVIDIA, the greater significance of a stock splitThere is a high possibility that it will be adopted by the Dow Jones Industrial Average (Dow), which consists of excellent stocksThat's probably it. Previously, NVIDIA's stock price was close to 1000 dollars, so there was a possibility that a large bias would occur in the index when incorporated into the Dow average (the Dow is weighted and averaged by stock price rather than market capitalization),Stock splits will resolve this issue. Due to the stock split, NVIDIA's stock price dropped to about $100, ranking 20th $Merck & Co(MRK.US$It became the second level after, $Disney(DIS.US$Ya $3M(MMM.US$Line up with
Analysts areNVIDIA has all the conditions to become a constituent stock of the Dow Average, such as a good reputation, a history of sustained growth, investor interest, and industry representation in a wider marketI'm thinking about it. The media speculates that there is a possibility that NVIDIA will be selected as a constituent stock of the Dow Jones Average in the latter half of this year or 2025Doing it.
Source: Bloomberg, BofA, Moomoo
ー MooMoo News Sherry
This article uses automatic translation for some of its parts
ー MooMoo News Sherry
This article uses automatic translation for some of its parts
Disclaimer: Moomoo Technologies Inc. is providing this content for information and educational use only.
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麦マル : Great explanation
Flagship of future-creating companies
Its name is NVIDIA
A company that gives us dreams and hopes for our future
Let's be an eyewitness to that together
And let's keep running together
6/10 may be the biggest turning point of the year
182639895こんさん : Moomoo's writing is very colorful and easy to read!
point of discussion 
red is very easy to read! thank you so much!!
Title part blue
183328606 麦マル :![[undefined]](https://static.moomoo.com/nnq/emoji/static/image/default/default-black.png?imageMogr2/thumbnail/36x36 "undefined")