Nvidia Corp. (NASDAQ:NVDA) shares have experienced a stratospheric rally fueled by the AI revolution. This surge has pushed the stock price beyond the reach of many average retail investors. CNBC host Jim Cramer, during a special episode of "Mad Money" broadcast live from GTC 2024, voiced the question on everyone's mind when he addressed the issue with CEO Jensen Huang.
Stock Split: A Possibility for Nvidia?
Cramer brought up the possibility of a stock split during the interview. Huang indicated he would consider it, but ruled out any immediate announcement. "We'll think about it. Today's not the day to announce," he said.
Cramer pressed the issue, reminding Huang that Nvidia had done stock splits in the past. Huang also highlighted potential benefits: "One of the things I really like about stock splits, by the way, is that it makes for the stock purchase for our employees and others ... We want to take care of our employees. They do such an incredible job for us."
How To Buy Nvidia (NVDA) Stock
Why This Matters: Nvidia currently ranks as the third most valuable company globally, boasting a market capitalization of $2.235 trillion. The stock closed Tuesday's session up 1.07% at $893.98, with a slight after-hours dip to $891.64, according to Benzinga Pro data. Year-to-date, the stock is up over 80%.
The average one-year sell-side price target for Nvidia, according to TipRanks, is $913.74, with the highest target on Wall Street at $1,200. This high stock value could deter retail traders, despite their recent enthusiastic participation in the rally.
According to Swaggy Stocks, Nvidia is currently the second-most trending stock on WallStreetBets, a forum known for its role in the meme-stock frenzy. Notably, Nvidia has a history of stock splits. As a public company, it has split its shares five times over the past 25 years:
- June 27, 2000: 2:1 split
- September 12, 2001: 2:1 split
- April 7, 2006: 2:1 split
- September 11, 2007: 3:2 split
- June 20, 2021: 4:1 split
Ken Mahoney, president and CEO of Mahoney Asset Management, expressed his expectation of another stock split within the next year in a recent interview with Bloomberg.
"Probably in the next year or so, I expect the stock to split and that would be able to get some small retail investors into the stock where they think it's out of reach right now," he reportedly said.
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