Nvidia stock split following share price rally as bull run continues
The Nvidia share price has spiked in recent days following confirmation of a stock split. Shares have gained 8% over the last seven days as the company’s 3 June Annual Meeting of Stockholders voted on the Nvidia stock split.
- Nvidia share price up 8% in the last seven days.
- Analysts bullish over Nvidia stock split.
- Can artificial intelligence innovations help Nvidia shares maintain momentum?
- Ready to trade the Nvidia share price? Open an account today
The Nvidia stock split was announced on 21 May. At the time, the Nvidia share price was just under $600, but it’s been on a bull run ever since. Shares opened at $702.50 on 7 June, 20% higher than their $585.50 valuation on 20 May, one day before the stock split announcement.
The stock split was officially proposed in the company’s Annual Meeting of Stockholders on 3 June. As per the presentation, Nvidia is seeking permission from shareholders to increase the number of shares of common stock from 2 billion to 4 billion.
The shareholder presentation states: ‘The Charter amendment will provide adequate shares of common stock to be used by the Board for general corporate purposes, including, but not limited to, expanding our business through mergers and acquisitions’.
Why has the Nvidia stock split sparked a bull run?
As well as creating more opportunities in the business market, the Nvidia stock split will help create ‘equity incentives’ for employees. The news has been received well by investors. Nvidia shares are up 84% over the last 12 months and SaltLight Capital Management continues to tip the American company as one to watch.
Indeed, as well as the first Nvidia stock split for two decades paving the way for mergers and acquisitions, the company’s position in the artificial intelligence (AI) space is appealing to analysts. At the heart of this optimism is the 2020 acquisition of Arm Technologies.
The $40 billion deal will, according to Nvidia’s recent shareholder meeting, combine the company’s ‘AI computing platform with Arm's vast ecosystem’. This has the potential to create a ‘premier computing company for the age of artificial intelligence, accelerating innovation while expanding into large, high-growth markets’.
What makes AI a lucrative opportunity?
The AI software market alone is expected to be worth $126 billion by 2025, according to data from Statista. Analysts believe Nvidia will be one of the companies at the forefront of this growth. That could sustain the Nvidia share price bull run over the next 12 months. However, in the short term, it’s the stock split that’s given the company a boost.
If the Nvidia stock split is approved, shareholders will receive three additional shares for every common stock they hold. This process is expected to take place at the close of trading on 19 July 2021. Nvidia will then start trading on a stock-split basis from 20 July 2021. This will be the point at which investors may start to see the true value of Nvidia shares. Although nothing is certain, the current trend is positive.
Will Nvidia shares continue to surge after the stock split?
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