When Did NVDA Stock Split?
The stock price of NVDA, a technology company that makes products such as cloud data centers, gaming, cryptocurrencies, and professional visualization has returned nearly 5,000% in the past decade. But how has its share price performed in the short-term? What can investors expect from NVDA in the near future?
NVDA's biggest business segment is gaming
Nvidia is a major player in the chip business. They sell chips for high-end PCs, and graphics chips for gamers and currency mining. Their graphics cards are often purchased by gamers to get the most realistic gaming experience possible. The company’s products are worth billions of dollars.
However, the stock has fallen more than 45% so far this year. And this is not even counting the decline in the S&P 500, which fell 6.2% over the third quarter. Nvidia’s gaming business declined 51% in the most recent quarter. This is a big drop compared to the industry as a whole, which was up 23%.
Despite the decline, Nvidia’s earnings still exceeded expectations. It reported $680 million in profit per share. But the company said its expected sales would fall by 17% from the same period last year.
Nvidia’s data center segment also grew. Data center revenue grew 31% in the most recent quarter. This was driven by the launch of the A100 GPU. NVidia expects to add more revenue in the fourth quarter. Meanwhile, Nvidia’s automotive segment grew 86% in the third quarter. While this is a small percentage of overall Nvidia’s revenue, it will be important to watch in the near future.
Nvidia’s automotive segment will have a large impact on the company in the coming years. Demand for self-driving cars is set to explode, and this could be a financial opportunity.
Nvidia’s data center business is also in flux. Government restrictions have hit it hard. At the same time, the company is trying to navigate U.S. sanctions on China. Nevertheless, Nvidia’s data center is the company’s destiny. They are the biggest company in the datacenter.
The company's products include gaming, cloud data centers, cryptocurrency, professional visualization, electric vehicles (EVs), 5G, and more
NVIDIA released its Q2 FY2023 results on August 24, 2022. Despite a disappointing quarter, the company’s operating profit was up 18 percent, with revenues growing by 18 percent. Its gross margins were a disappointing 60.4 percent, however, and did not meet the company’s forecast of 62.6 percent.
In addition to supplying chips to support machine learning, Nvidia has hands in gaming, autonomous driving, cloud data centers, 5G, and more. And with a strong market share in each of these sectors, the company could be looking at a major growth cycle.
For example, in the past two quarters, Nvidia secured over $11 billion in design wins. The company’s products and services are used by companies such as Google and Amazon.
On the other hand, Nvidia’s data center sales have been booming. According to the company, artificial intelligence is driving record revenues for these platforms. Additionally, the company’s automotive business saw a boost in revenues. Its products are used by 25 manufacturers of electric vehicles.
The company also noted a decline in gaming sales, which was primarily due to a cyclical slowdown in Europe during the summer months. However, virtual reality will continue to drive significant revenue in this segment.
Finally, in the automotive market, Nvidia’s DRIVE Hyperion and Orin platforms are used by 25 electric vehicle manufacturers. During the past quarter, the company’s sales in this segment were $172 million, up from $144 million the prior year. Nvidia also reported strong growth in its Automotive and Data Centers segments. In the third quarter, its Automotive sales grew 59%, while its Data Center sales grew 45%.
While its overall operating profit was up, the company’s gross margins were a disappointing 60.4 per cent. The company expects its gross margins to be in the 60-62 per cent range for the full year.
Dividend income is not a factor in investment decision
A Nvda stock split is not going to affect the value of your shares, nor is it a necessity for you to hold it. But, the stock is certainly interesting enough to warrant a look. Whether or not the company will follow through on its promise remains to be seen. One of the perks of holding a stock is a regular dividend. While this may not be the most exciting announcement, it is one of the more lucrative perks of owning shares of a company with a history of profitability.
If you have been a longtime investor in the semiconductor chip biz, you are familiar with the numerous quarters of rosy financial reports. The company’s management has taken steps to rectify the situation, including announcing a new policy that mandates all stockholders be eligible for quarterly payouts. And with the recent completion of an arm deal, a solid performance is no longer an impossible feat.
With that being said, it’s time to start thinking about the next time a stock split is announced. You may be holding on to an impressive number of shares, but the price to value ratio isn’t so hot. Luckily, most brokerages are able to divide shares by the fractional digits. That is, even if you only have a small pile of NVDA shares. So, it’s time to consider a stock split to make it easier for you to get your hands on a piece of the pie.
As an added bonus, you get the chance to see what the new and improved Nvda is going to be like. This includes the aforementioned quarterly payouts, as well as an additional $4 billion in authorized shares, which are slated to grow to around $4 billion by 2021.
Short-term bullish effect on the stock price
Several big tech firms have recently announced stock splits. These splits have attracted a lot of attention from the trading crowd. They have made some companies’ stock prices rise as well.
However, these splits do not necessarily benefit the company’s long-term prospects. Instead, they serve as a psychological factor. When an investor buys a stock with a split, they see the number of shares they own rise.
This psychological factor could explain why Nvidia has rallied since its split announcement. The price of the company’s shares has increased 30 percent in the past three months. While this is not an indication that the stock has lost steam, it does mean that the share price is overbought.
NVDA’s stock has also climbed on the back of its recent earnings releases. Earnings surprises have been a common occurrence for the chip maker. As a result, analysts have boosted their price targets.
Analysts believe that NVDA stock will face new headwinds in the coming months. But, the chip maker has been delivering blistering results, and management has been successful in executing its strategic priorities.
If Nvidia can deliver solid earnings growth, it will eventually bring a bullish price target above $1000. With continued earnings growth, a stock split might boost the uptrend.
A four-for-one split should help attract fresh investment. The short-term effect of a split will depend on the timing. It could be that the resulting price rise will be enough to lure in new investors. Alternatively, it might not be.
Even if a split doesn’t improve the value of a company, it does increase the number of shares available. In turn, more investors will push the price higher.
NVDA's share price has delivered nearly 5,000% returns over the past decade
The chip stock NVIDIA has rewarded long-term investors in recent years. Over the last five years, the share price of the company has delivered nearly 5,000% returns. Analysts are generally bullish on the company. They believe NVIDIA will continue to grow, though at a slower pace. If you’re looking for an opportunity to get in on the action, you may want to consider buying now.
NVDA is a high-growth company with a solid balance sheet. It has a large market cap of over $500 billion. In addition, the company has strong margins. NVIDIA’s top line is growing at 80% a year. That’s a lot of growth for a small company. However, it won’t last forever.
Assuming that growth slows, NVIDIA’s valuation is likely to compress. But it still looks like a solid long-term investment.
Despite a series of challenges over the past year, the company’s fundamentals are excellent. NVIDIA has a clean balance sheet and its profit margins are impressive. While investors might be concerned that the company’s share price has been impacted by the crypto market’s fall, the company’s growth prospects are still very bright. The company’s chips are being used in autonomous driving, gaming, and data centers.
NVDA’s share price has been declining since early in the year. It is near its lows for the 2022 fiscal year.
Nevertheless, NVDA’s current prices are attractive for long-term investors. Especially if you have a low risk tolerance. This is a chance to get in on the ground floor of one of the most promising semiconductor companies in the world.
NVDA’s shares are currently trading above the longer-term median valuation of other growth mega-caps. Investors should also keep in mind that the law of large numbers suggests that maintaining high relative growth rates becomes more challenging as a company’s size grows.