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Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 70% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money.

NVIDIA stock split: what to know and how to buy shares

NVIDIA, one of the world's leading technology companies, has announced a 10-for-1 stock split. Find out what this means for shareholders and how you could take advantage of the move.

Wall Street Source: Getty Images

NVIDIA 10 to 1 stock split: the need-to-knows

A stock split occurs when a company decides to divide its existing stock into a larger number of shares, typically to lower the trading price of individual shares and make them more accessible to a broader range of investors.

Importantly, although the number of shares increases, the total value of an investor's holdings remains the same, as the split does not affect the company's overall market valuation.

Stock splits are a strategy used by many prominent technology companies to maintain the liquidity of their shares. For example, Amazon and Apple have conducted multiple stock splits to keep their share prices affordable after significant rises in market value. This method helps attract new investors and retains the stock's attractiveness in a competitive market.

NVIDIA Corp (All Sessions), a leader in the graphics processing unit (GPU) industry, announced a 10-for-1 stock split. This decision means that each NVIDIA stock shareholder will receive ten new shares for every old share they possessed, multiplying the total number of shares by ten.

Following NVIDIA's stock split, the number of shares in circulation will increase tenfold, while the price of individual shares will proportionately decrease. If, for example, NVIDIA shares were priced at £1,000 each before the split, they would be adjusted to around £100 post-split.

The NVIDIA 10 to 1 stock split is designed to make shares more accessible, thereby potentially increasing trading activity and accessibility. While the market cap and the shareholder's equity in the company remain unchanged, this move could broaden the appeal of NVIDIA shares to a wider audience, following a trend set by other tech giants.

Chris Beauchamp, Chief Market Analyst at IG, said that the stock split would help to broaden out the appeal of Nvidia shares, making them more accessible to retail investors. ‘It may also boost liquidity in the stock, though this has not been much of an issue during the stock’s recent meteoric rise.’

When is the NVIDIA stock split?

The NVIDIA stock split will affect shareholders of record at market close on Thursday, June 6. These shareholders will receive nine additional shares after the market close on Friday, June 7. Split-adjusted trading of NVIDIA stocks will then commence on Monday, June 10.

Why is NVIDIA splitting its stock?

NVIDIA is splitting its stock to make shares more accessible for retail investors. Having experienced a significant bull run, with stock prices rising over 2000% in the past five years, this split aims to bring the stock price back to levels seen around 2020. Moreover, stock splits can lead to a potential increase in share price.

Another motivation for such a split could be the enhancement of eligibility for inclusion in price-weighted indexes like the Dow Jones Industrial Average (DJIA), as these indexes often exclude extremely high-priced stocks due to the disproportionate impact their price movements could have on the index.

‘Given Nvidia is now larger than all but two components of the Dow, its inclusion seems only a matter of time once the stock split is completed. As a company with such a vital part to play in the future of technology, its membership in the world’s perhaps best-known index seems sensible’, said Beauchamp.

What could NVIDIA’s split-adjusted share price be?

The split-adjusted share price of NVIDIA would be the current trading price divided by 10. So, if it is trading around $1,000, post-split the share price would be around $100 per share.

Buying NVIDIA shares: how to trade or invest in NVIDIA shares

  1. Do your research on NVIDIA - Before making any investment or trading decisions, it's crucial to gather information about NVIDIA, including its market performance, recent news, financial health, and industry position. Analyse trends and forecasts to understand the potential of NVIDIA as an investment.
  2. Decide whether to trade or invest - Determine if you want to own NVIDIA shares or speculate on their price movements. Investing involves buying shares to hold for a period with the hope that their value will increase. On the other hand, trading on leverage means using borrowed funds to magnify your position size and increase gains or losses. It entails higher risk and does not involve owning the shares.
  3. Open a trading or investing account with us - Sign up for an account that suits your decision. If you want to invest, open a share dealing account, which will allow you to buy and own NVIDIA shares. If you prefer trading, open a CFD or spread betting account.
  4. Search for NVIDIA in our platform - Once your account is ready, use our platform to find NVIDIA. You can use the search function to look up NVIDIA by its ticker symbol or company name.
  5. Take your position - After finding NVIDIA, proceed to take your position:
    • If investing, buy the number of shares you want based on your research and financial capacity.
    • If trading, decide whether to go long (buy) if you expect the stock price to rise or short (sell) if you anticipate a decrease in stock price, using contracts for differences (CFDs) or spread betting to trade using leverage.

Investing in NVIDIA stock means you'll take direct ownership of the shares – making you an NVIDIA shareholder. When investing, you'll profit if the NVIDIA share price increases above the price at which you bought them. With us, you can buy NVIDIA shares from zero commission on our share dealing platform.

Trading refers to speculating on NVIDIA's share price with derivatives like spread bets and CFDs. These financial derivatives allow you to take a position on NVIDIA using leverage and without having to take direct ownership of the company's stock.

Remember, when you take a position on any stock, you could get back less than you put in, and past performance is no indicator of future returns. When you trade on leverage, your risks are magnified because you're opening a position worth more than your initial investment, potentially leading to faster gains or losses and possibly losing more than your initial deposit.

NVIDIA stock split history

NVIDIA has conducted five stock splits since its initial public offering (IPO) in 1999. The most recent split occurred on July 20, 2021, which was a 4-1 split. Here are the details of each split:

  • July 20, 2021: 4-1 split
  • Sept. 11, 2007: 3-2 split
  • April 7, 2006: 2-1 split
  • Sept. 12, 2001: 2-1 split
  • June 27, 2000: 2-1 split

An investor who purchased a single share of NVDA 25 years ago would now hold approximately 48 shares of the company.

This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.

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