A Milestone in Nvidia’s Journey
Nvidia’s 10-for-1 stock split marks a significant achievement for the artificial intelligence (AI) chip leader. This event is the company’s first stock split in nearly three years, following its shares split during the pandemic-triggered tech boom. It adds to a series of stock splits initiated by the dynamic “Magnificent Seven,” a group of high-flying tech giants that began dominating the market at the onset of the pandemic.
History of Stock Splits Among the Magnificent Seven
Five out of the seven top tech stocks have undergone share splits in the past four years, with two companies, including Nvidia, opting for split actions twice. The table below illustrates recent stock splits among the Magnificent Seven:
| Company | Date | Size of Split |
|---|---|---|
| Apple | Aug. 28, 2020 | 4-for-1 |
| Tesla | Aug. 31, 2020 | 5-for-1 |
| Nvidia | July 20, 2021 | 4-for-1 |
| Amazon | June 6, 2022 | 20-for-1 |
| Alphabet | July 15, 2022 | 20-for-1 |
| Tesla | Aug. 24, 2022 | 3-for-1 |
| Nvidia | June 7, 2024 | 10-for-1 |
Data source: Company reports.
Microsoft and Meta Platforms, despite their absence from this list, are poised to have the highest individual share prices among the Magnificent Seven post-Nvidia’s split, making them prime candidates for potential future stock splits.
Potential For a Microsoft Stock Split
Microsoft, boasting a market cap exceeding $3 trillion and a history dating back to the 1980s, has not undergone a stock split in nearly a generation. The company’s last stock split, a 2-for-1, occurred in February 2003 during the dot-com era. Under CEO Satya Nadella, Microsoft has witnessed a renaissance, particularly excelling in cloud computing with Microsoft Azure at the forefront. The tech giant, now a prime player on the Dow Jones Industrial Average, may consider splitting its stock to align with the index’s price-weighted nature, a move that could appeal to investors.
A Glimpse into Meta Platforms’ Potential
Unlike its peers in the Magnificent Seven, Meta Platforms has never experienced a stock split since going public in 2012. With its stock price at $477 and significant appreciation since its IPO, Meta Platforms has been a solid performer. While no official stance on stock splits has been articulated by company executives, the recent dividend payout indicates a willingness to explore new strategies. A stock split could enhance retail investor appeal and potentially streamline admission into the Dow, given its current share price dynamics.
The Next Stock Split Contender
Between Microsoft and Meta Platforms, the latter appears more inclined towards a stock split due to its higher share price and more favorable valuation metrics. Although not guaranteed, a stock split could be on the horizon for Meta Platforms as its share price continues to climb.
Investing Insights on Meta Platforms
Before diving into Meta Platforms stock, it’s essential to consider the broader investment landscape. The Motley Fool Stock Advisor team recently highlighted the top 10 stocks for potential investors, with Meta Platforms absent from the selection. Looking back at Nvidia’s inclusion in this list in 2005, where a $1,000 investment could have yielded over $750,000, the potential of strategic investments is evident. The diverse offerings and consistent growth of the Stock Advisor service underscore the possibility of remarkable returns in comparison to standard market indices.
