Nvidia (NVDA +3.65%) never is short on big news. Most recently, the company wowed investors with details of its new Blackwell architecture and said the launch will happen later this year. And prior to this, Nvidia said it aimed to start shipping its H200 graphics processing unit (GPU) -- which doubles the performance of its current chip -- in the second quarter of the year.
All of this along with soaring earnings have helped the stock roar higher, climbing more than 200% over the past year. Now, a couple of days ahead of Nvidia's quarterly earnings report, it's logical to wonder about the company's next big announcement. And my prediction is, this time, it may not have to do with an upcoming product. Instead, it may be a move that directly impacts Nvidia's share price...
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Nvidia stock approaches $1,000
So, as mentioned, Nvidia's stock price has climbed in recent years, and today it's reached more than $940. Some analysts even see it surging well beyond $1,000 within the coming 12 months. It seems very possible considering Nvidia's earnings over the past several quarters. This leader in the artificial intelligence (AI) chip market has reported triple-digit and even quadruple-digit gains in earnings, and growth isn't likely to taper off any time soon.
That's because we're in the early days of the AI story, so demand is far from reaching a peak. For example, the percentage of companies mentioning AI on their earnings calls has climbed significantly in recent years -- but it still was only at about 16% last year, according to Goldman Sachs, as quoted by Statista. So there's a lot of room for growth. And forecasts for an AI market worth more than $1 trillion by the end of the decade further support the idea of more growth to come.
Nvidia, in its forecast for the fiscal 2025 first quarter, has said it expects to report $24 billion in revenue -- representing yet another triple-digit increase in revenue year over year. And along with this and other news during Wednesday's earnings report, the company may make a big announcement directly related to share price.
I predict Nvidia may launch a stock split, a move that lowers the price of each individual share without changing the overall market value of the company. Companies do this by issuing additional shares to current holders.
Stock splits themselves aren't catalysts for share performance, but they can be positive for a company over time as they do make it easier for smaller investors to get in on a particular stock. The price of $1,000 for a stock represents a psychological barrier for some investors -- who automatically consider the price too high even if the actual valuation remains reasonable. And some investors don't have access to fractional shares or prefer buying full shares, pushing a $1,000 stock beyond their reach.
NASDAQ: NVDA
Key Data Points
Nvidia's stock split history
Now, let's consider Nvidia's stock split history, which shows the company is open to such moves. Nvidia has completed five stock splits over the past two decades, and on each occasion the stock was trading much lower than today's level. So it seems possible that now, with the stock approaching $1,000 and plenty of growth on the horizon to trigger additional gains, Nvidia would consider a new stock split.
Should you wait for a potential split to buy Nvidia or get in on the stock right now? The great news is you can do either. Nvidia is a market leader and focuses on the investment needed to remain in its position -- on top of this, the company happens to be operating in one of today's highest-growth areas.
Nvidia's prospects are bright, and that means whether you invest in, say, a fractional share today or wait to buy multiple shares if the company completes a stock split in the near future, the outcome will be the same. If you keep your Nvidia holding for the long term, you're likely to benefit as this exciting AI growth story unfolds.
So, whether my prediction is correct or not, an Nvidia purchase today or in the months to come, as part of a diversified portfolio, still may help you along the path to financial freedom over time.
