Nvidia NVDA.OQ, the giant gaming graphics and crypto-mining semiconductor manufacturer, is the 9th most valuable company in the S&P 500 with a market cap of almost $500 billion.
Since the pandemic began in the spring of 2020, the company's stock has experienced a massive, almost 4-fold, growth. At one point, market analysts were already setting price targets of $1,000 to be reached fairly soon as the gaming and crypto industries continue to grow rapidly and show no sign of slowing down. 🎮 ฿
However, if you look at the NVDA.OQ chart now, you'll see that the stock is now hovering around the $191 mark.
This is due to Nvidia's executed 4:1 stock split just a week ago. This means that each share has been divided into 4 cheaper shares. That, of course, doesn't affect the company's market cap, however, it makes the entry price more affordable for new investors.
Why this may be a big deal
Although Nvidia's stock has recently declined and recovered in a pretty apparent correlation with Bitcoin's recent dip, the stock split may signal an upcoming growth for NVDA.OQ in the future.
It was a similar case with Tesla back in August 2020, when its stock had reached $2000 level and seemed overpriced (compared to its bottom of roughly $450 back in March 2020), and Tesla announced a 5:1 stock split, cutting the prices back to $400 level.
In the eyes of professionals, it makes no difference what the buying price is. However, newer traders who often aren't yet analyzing the value of stocks by market cap, P/L ratio, and other factors, may get intrigued by lower prices of popular companies' stocks.
Hence, a stock split may be a driving force for attracting new capital to a stock, despite the economic fundamentals.
Will it happen? Who knows! But it may be worthwhile tracking NVDA.OQ in the upcoming months. 🧐
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