Many high technology stocks have completed stock splits in recent years, from Amazon To the alphabet, as their shares were roaring higher. This move involves a company issuing additional shares to existing holders to reduce the value of each individual share. This doesn’t change the market value of the company or the value of your investment — but it’s positive for the company because it makes the stock more accessible to a wider range of investors.
And for investors, stock dividends often signal that a company is doing well and that management expects the momentum to continue — and that, again, the shares will move over time. can increase So it’s worth taking a closer look at stock dividend companies, as some can make interesting long-term investments.
Companies that make excellent candidates for distribution often operate in high-growth industries and have seen their shares climb rapidly, even reaching $1,000. This is the case with two artificial intelligence (AI) stocks. They haven’t announced a split, but I wouldn’t be surprised if they do in the near future, thanks to their incredible performance over the past few years. Let’s take a closer look at the AI stocks that look poised for a split.
1. Nvidia
Nvidia (NASDAQ: NVDA ) The stock has risen 500% over the past three years as the company has established its position as the world’s AI chip giant. The company sells graphics processing units (GPUs) that power the most important steps in any AI project: training and inferencing AI models. This allows these models to do what we want them to do, such as solving complex problems.
The tech giant’s GPUs were initially known for powering video games and graphics, but the introduction of the programming platform CUDA made it easier to use GPUs for general computing — and that’s why they’re being used for AI. Opened the door. Now, instead of generating most of its revenue from the video game business, Nvidia generates it from the data center business. Last year, revenue and profits grew by triple digits, and considering we’re still in the early days of the AI boom, growth may continue.
Nvidia has split its stock five times in the past, with the stock posting a period of dividends after the most recent action in 2021 — and at the time, shares were trading at less than $250.
This year, Nvidia’s stock has climbed more than $900, bringing it very close to the $1,000 level — which may deter some investors from buying the stock. Due to the current stock price and the fact that this could be a great time for this AI star to initiate a stock split, a new growth driver could be just around the corner. The company plans to release its new Blackwell architecture and chips later this year, and growth from that platform could supercharge Nvidia stock.
2. Super microcomputer
Super Microcomputer (NASDAQ: SMCI ) When it comes to sharing performance in recent times, even Nvidia has been left behind. The stock has gained more than 2,200% in the past three years and climbed above $1,000 earlier this year before sinking to current levels of around $940.
Like Nvidia, Supermicro has seen its revenue stream change thanks to demand for AI. The 30-year-old company, which makes servers, full rack-scale solutions, and other equipment, just announced its first $3 billion quarter as AI users flock to its products. Supermicro works closely with top chipmakers, including Nvidia, to rapidly integrate their products into their platforms, and that’s driving record demand. This also means that SuperMicro benefits not only from its own new product releases, but from new chip releases from all the major chip companies — from Nvidia to Intel And Advanced Micro Devices.
Customers also like Super Micro’s products because they are tailored specifically to their needs, and the company’s manufacturing process means it can fill orders quickly.
Super Micro’s revenue has grown in recent times, and the company has taken steps to maximize its economies of scale to keep the good times going. The tech giant is doing so by ramping up production, with a new Malaysian facility to focus on lower costs and higher volumes.
Super Micro has never split its stock, but given the stock price today — and the potential for a new wave of growth ahead, now would be a great time to launch such an operation.
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Suzanne Frey, an Alphabet executive, is a member of The Motley Fool’s board of directors. John Mackey, former CEO of Whole Foods Market, is a member of the board of directors of The Motley Fool, an Amazon subsidiary. Adria Cimino has positions at Amazon. The Motley Fool has positions and recommends Advanced Micro Devices, Alphabet, Amazon and Nvidia. The Motley Fool recommends Intel and recommends the following options: long January 2023 $57.50 calls on Intel, long January 2025 $45 calls on Intel, and short May 2024 $47 calls on Intel. The Motley Fool has a Disclosure Policy.
Stock Split Watch: 2 Artificial Intelligence (AI) Stocks That Look Poised for a Split was originally published by The Motley Fool.