Nvidia Stock Split Leads to New NVDA Price Targets
Shares of Nvidia began trading on a split-adjusted basis today, leading many analysts to revise their ratings and price targets.
Nvidia (NASDAQ: NVDA) began trading today at its new split-adjusted price after its 10-to-1 stock split went into effect on Friday at the closing bell. This move has reshaped the landscape for both the company and its investors. The stock split, a strategic effort to make Nvidia’s shares more accessible, has led to numerous price target adjustments and renewed analyst confidence in the tech giant’s future.
Updated NVDA Stock Ratings & Price Targets
Following the Nvidia stock split, Evercore ISI adjusted its NVDA price target to $131 from $1,310, maintaining an Outperform rating. This adjustment reflects the new share structure, where shareholders now hold nine additional shares for every one they previously owned. Nvidia’s decision to split its stock is a testament to its significant growth, driven by strong demand for its GPUs in gaming, professional markets, and the burgeoning field of artificial intelligence.
Analysts from Barclays, Susquehanna, and TD Cowen have also revised their price targets post-split. Barclays’ Tom O’Malley raised his target to $145, reflecting incremental sales opportunities from sovereign nations purchasing Nvidia’s AI chips.
Susquehanna’s Christopher Rolland also set a target of $145, expressing confidence in a smooth transition to Nvidia’s B100 AI processors for data centers. Meanwhile, TD Cowen’s Matthew Ramsay upped his target to $140, reiterating Nvidia’s leadership in accelerated computing.
Nvidia Stock Split Sparks Dow Discussions
The stock split has not only adjusted price targets but has also sparked discussions about Nvidia’s potential inclusion in the Dow Jones Industrial Average. This speculation is fueled by Nvidia’s newfound affordability post-split, aligning its share price more closely with other Dow components.
The company’s stock performance remains robust, reflecting its dominant market position. On the first day of split-adjusted trading, Nvidia shares saw modest gains, closing at $121.79. This positive movement is underpinned by Nvidia’s substantial market capitalization, which briefly surpassed Apple’s (NASDAQ: AAPL), making it the world’s second most valuable company before settling as the third.
The meteoric rise of NVDA stock, which more than doubled this year and tripled in 2023, is attributed to soaring demand for its semiconductors. These chips power AI applications and have driven Nvidia’s revenue to triple in the latest quarter compared to the same period a year earlier. Nvidia’s strategic moves, including the stock split, are designed to make stock ownership more accessible, both for investors and employees.
Amid this backdrop, some investors had concerns about a potential “air pocket” in sales during the transition from Hopper series GPUs to the next-generation Blackwell series. However, Susquehanna’s Rolland reassured that supply-chain checks indicate a smooth transition.
Susquehanna analyst Christopher Rolland noted:
“We and many investors have been fearful of an ‘air pocket’ in the transition from Hopper to Blackwell. Discussions and broad checks across the supply chain quell our fears and are now giving us confidence in a sustained and smooth transition.”
Post-Split Dynamics for Competition
The Nvidia stock split has also influenced market dynamics for its competitors. Advanced Micro Devices (NASDAQ: AMD) saw its stock downgraded by Morgan Stanley, with analyst Joseph Moore citing overly high investor expectations for AMD’s AI business. AMD shares fell 4.5% following the downgrade.
Looking forward, Nvidia’s future appears promising, buoyed by the continued demand for its GPUs and AI chips. The recent stock split and subsequent analyst optimism underscore Nvidia’s strategic positioning in the market.
As analyst Christopher Rolland stated:
“Reiterating our thesis, we see Nvidia as the leader in accelerated computing.”
Investors will continue to monitor Nvidia’s performance closely, especially in light of potential regulatory scrutiny from the U.S. DOJ and the FTC. These agencies are examining AI industry business practices, which could impact Nvidia and companies like OpenAI and Microsoft (NASDAQ: MSFT).
In summary, Nvidia’s 10-to-1 stock split marks a significant milestone, enhancing stock accessibility and setting the stage for continued growth. With new price targets and a possible DJIA entry, Nvidia is in a great position to maintain its leadership in the tech industry.
Shares of Nvidia stock last traded at $121.79, up +0.75% today. YTD, NVDA stock is up +152.83%. All time, NVDA stock is up +304,375%.
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Disclaimer: Wealthy VC does not hold a position in any of the stocks, ETFs or cryptocurrencies mentioned in this article.
