One of the biggest winners of the artificial intelligence (AI) boom has been chipmaker Nvidia (NVDA 2.94%). The company's revenue has soared more than 1,000% over the last five years, and its share price has done the same.
NASDAQ: NVDA
Key Data Points
But unlike many other hot AI companies, Nvidia has issued numerous stock splits to keep its shares affordable, including two in the last five years alone. With shares now up more than 50% since the last split, is another split coming? Here's what we know.
Splitting pairs
Since 2000, Nvidia has split its stock six times, an average of once every four years. The last split was in 2024, so that indicates that, on average, we should expect a split in 2028. But averages can be deceiving.
Nvidia's splits have generally come in pairs, with longer gaps between splits. Its first 2-for-1 stock split was in June 2000, and was quickly followed by another 2-for-1 split in September 2001. In a 2-for-1 split, the company issues each stockholder two new shares for every old share they hold, but the share price is cut in half, so while the number of shares doubles, the total value of each investor's position doesn't change.
Image source: Nvidia.
After the September 2001 split, it was almost five years before another one, which took the form of a third 2-for-1 split in April 2006. That was again followed fairly rapidly by another split in September 2007. This time, however, the split was a 3-for-2 split, meaning that each investor's share count was increased by 1.5 times instead of doubling.
The final two splits occurred in July 2021, when the stock split 4-for-1, quadrupling the share count, and the most recent 2024 split, which was a massive 10-for-1 split. For those keeping track, that means investors who owned a single share of Nvidia stock before June 2000 now own 480 shares.
Because we just had a pair of (large) stock splits in the recent past, Nvidia would seem less likely to offer one in the near future, but there's one more factor to consider: share price.
Image source: Nvidia.
Why split now?
One big reason a company splits its stock price is that the price of a single share has become so expensive that it's out of reach for many retail investors. Of course, with fractional shares -- buying less than a full share of stock -- now an option at many brokerages, that's not necessarily a barrier to owning a pricey stock.
Nvidia's stock prices at the time of its first four splits were well below its current $180 per share, ranging from about $50 per share in 2007 to about $142 per share in 2000. However, its last two split prices were much higher: about $751 per share in 2021 and $1,200 per share in 2024. Currently, Nvidia's stock is trading for about $180 per share, so it seems unlikely the company will split its stock until it's increased at least a little bit more from here.
