Investing

Here's When NVIDIA Will Likely Announce a Stock Split

NVDA NVIDIA Stock Chart
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Earlier this week I published an article on the three reasons NVIDIA should issue a stock split soon. With shares near $1,000, history says NVIDIA (NASDAQ: NVDA) will split their shares, but one question on NVIDIA investor’s minds is just when this stock split will happen. 

Let’s dive into what the timing of an NVIDIA stock split could look like. 

Why NVIDIA Should Issue a Stock Split 

Source: Jon Ogg

If you’re looking for the reasons NVIDIA should issue a stock split, I’ll quickly summarize them:

  1. The company is trading significantly above where it issued a 4:1 stock split in the past. 
  2. A stock split will make NVIDIA more accessible to retail traders 
  3. A stock split could pave the way to NVIDIA being added to the Dow Jones Industrial Average 

Again, you can read more details in my prior article, but the key idea here is that NVIDIA set a precedent in 2021. At the time they announced a 4:1 share split at around $600 per share and explained they were doing so to make ownership in their stock accessible to all. 

With the company closing the week trading at $878.36, it’s now trading at 46% above when NVIDA last announced a stock split. So, just when will they announce a split?

How Does a Company Decide on a Stock Split?

One question that might be on your mind is why hasn’t NVIDIA announced a stock split yet. After all, they’re trading at a price 46% higher than when they announced their last stock split! 

The simple answer is that stock splits generally require board of director approval. In 2021, NVIDIA announced their stock split on May 21st, which coincided with a board vote to split the stock 4:1. 

However, the board’s decision to split NVIDIA’s stock wasn’t final. After the board announced the stock split, NVIDIA’s shareholders still had to approve the stock split. This vote happened in front of the company’s Annual Meeting of Stockholders, which took place on June 3rd, 2021. 

When NVIDIA Could Announce Its Next Stock Split 

So, if you’re looking for dates when NVIDIA could announce their next stock split, here are a few to circle. 

  • Late May Announcement: The last time NVIDIA announced a dividend, it did so two weeks before its Annual Meeting of Stockholders. The company still hasn’t announced its Annual Meeting of Stockholders date for 2024. In 2021, it happened on June 3rd, and last year it took place on June 22nd. So, it’s likely NVIDIA could initially announce a stock split in late May to mid-June and give a couple of weeks before its Annual Meeting of Stakeholders.
  • Approval in June: Given this information, it’s likely that an NVIDIA split would be approved in June if the company chooses to split its shares. However, approval isn’t a final step in splitting shares. 
  • Stock Split Effective in late July: The last time NVIDIA split its shares the share split was approved by a shareholder vote on June 3rd, and the actual date spit shares were distributed was July 19th. So, if NVIDIA announces a split and shareholders approve in June… The date to circle on your calendar of when shares will actually trade at their split price is likely late July. 

Why a Share Split Matters 

Source: pestoverde / Flickr

Academically speaking, share splits don’t change the value of a company. However, a trend like artificial intelligence is something that mainstream investors have latched onto. It wouldn’t be surprising if an NVIDIA share split drove more attention to the company and attracted more investors. 

In short, the possibility of NVIDIA splitting its shares may not matter, but it won’t be a negative to demand for the company’s shares and could very likely be a big positive. 

With all this being said, while NVIDIA has demonstrated in the past it wants to give more access to its shares and will likely issue a stock split, there are no guarantees. Between NVIDIA and Super Micro Computer (Nasdaq: SMCI), it’s likely one of the market’s current AI darlings will issue a stock split. The race is on to see which one will act first. 

 

 

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