Predicting Stock Splits in 2025: Should You Be Watching Nvidia and These Other Companies?

As we look ahead to 2025, stock splits are something you’ll want to keep an eye on. Companies like Nvidia might be getting ready to split their stocks, which could be a big opportunity for investors. But what exactly does that mean, and how could it affect your investments?

We have covered stock splits, why the Nvidia stock split happened, and which other companies could do the same. We’ll introduce you to Meyka, a helpful tool for your investments.

What are Stock Splits

A stock split happens when a company divides its existing shares into multiple smaller shares. It makes them more affordable without changing the total value of the company. When a company announces a stock split, the number of shares increases, while the price per share decreases proportionally. However, the company’s market capitalization, which is the total value of all its shares, stays the same. 

For example, if a company has 1 million shares priced at $100 each and undergoes a 2-for-1 split. It will now have 2 million shares at $50 each and maintain a total value of $100 million.

Reasons Companies Choose to Split Their Stock

Companies choose to split their stock for several reasons. One common reason is to make their shares more accessible to investors. When stock prices become too high, it can be difficult for smaller investors to buy them. Companies lower the price through a stock split and can attract more investors and increase trading activity.

Over the years, many major companies in the US stock market have opted for stock splits. For example, in June 2014, Apple executed a 7-for-1 stock split, reducing its share price from around $645 to approximately $92 per share. Despite the split, Apple’s total market value remained about $555 billion. Tesla also conducted a notable 5-for-1 split in 2020, making its shares more affordable and drawing in a larger number of investors. Other major companies, such as Amazon and Google (Alphabet), have also used stock splits as a strategic move to keep their shares within reach of everyday investors.

Why Nvidia Could Be a Candidate for a Stock Split in 2025

Nvidia has impressive market performance. Its strategic positioning in the AI and semiconductor industries make it a strong candidate for a potential stock split in 2025. Several factors contribute to this possibility, including the company’s soaring stock price, market expansion, and investor demand.

Key Reasons for the Nvidia Stock Split

Rising Stock Price:

Nvidia’s stock has seen substantial gains. It makes it less affordable for retail investors. A stock split would reduce the share price, increasing accessibility and liquidity in the market.

Increased Investor Participation:

Lowering the per-share price can attract more investors. Retail investors find it easier to buy shares. Institutional buyers can also enter at lower prices.

Confidence in Future Growth:

A stock split often signals strong growth prospects and management’s confidence in sustained revenue and profitability, especially with Nvidia’s leadership in AI, gaming, and data centers.

Historical Precedents:

Apple and Tesla used stock splits to attract more investors. This helped increase trading activity. Their stock prices had gone up a lot before the split. Nvidia might do the same in the future.

Market Factors Supporting a Potential Split

• Nvidia’s GPUs and AI accelerators are in high demand. They are  driving revenue growth and solidifying its position as a market leader.
• Nvidia continues to innovate and adapt, ensuring long-term resilience despite recent export restrictions imposed by the Biden administration.
• A stock split can further enhance Nvidia’s already strong market capitalization which  makes shares more attractive and accessible to a wider audience.

Considering these factors, Nvidia could use a stock split as a strategic move to maintain momentum, enhance investor engagement, and solidify its growth trajectory heading into 2025.

Companies to Watch for Potential Stock Splits in 2025

The AI boom in the US stock market has made many companies grow fast. Some of them might announce stock splits in 2025. Here are a few to keep an eye on:

Microsoft (NASDAQ: MSFT)

Microsoft is investing big in AI. It partnered with OpenAI and plans to spend $80 billion on AI data centers this year. Experts believe its stock could hit $600 soon. If that happens, a stock split could make it easier for regular people to invest.

Meta Platforms (NASDAQ: META)

Meta has bounced back after tough times in 2022. Its focus on AI helped its stock grow 63% in the past year. So far, Meta hasn’t done a stock split. If its stock keeps climbing, a split could happen in 2025.

Fair Isaac (FICO):

The company behind credit ratings has had a remarkable year with nearly 80% growth, pushing its stock price to over $2,000. A potential 20-to-1 stock split could make their shares more accessible  with strong margins and rising revenue.

Netflix: 

After a major recovery from a 75% drop in early 2022, Netflix’s stock is now above $900. Their dominance in streaming, improved margins, and innovative strategies like ad-supported tiers and password-sharing crackdowns could lead to a 10-for-1 stock split.

Tesla: 

Tesla’s stock went up after the 2024 election. New technology like self-driving cars and the Optimus robot are exciting investors. If the stock price stays near $500, a 2-for-1 stock split might happen.

Take-Two Interactive: 

The maker of Grand Theft Auto and Red Dead Redemption is earning huge revenue, mainly from GTA 6. They have strong game development and a big mobile gaming lineup after buying Zynga. A stock split could happen to keep shares affordable as the company grows.

These companies are shaping the future of AI. A stock split could make it easier for more people to invest in their growth. If you want to keep an eye on these companies’ current stocks, use Meyka, an AI trading assistant. 

How a Stock Split Could Impact Investors

• A stock split makes shares look cheaper, even though the value of the company hasn’t changed. This can make more people interested in buying, thinking they are getting a better deal.
• Many investors see a stock split as a good sign, thinking the company is doing well and will continue to grow. This can make them feel more confident and encourage them to buy more shares.
• After a stock split, investors might feel happy because they now own more shares. Even though their total investment value stays the same, they feel like they’re getting more, which makes them optimistic about the future.
• A stock split can make investors think they’re richer because they own more shares, but their share of the company hasn’t increased. This can lead to decisions based more on emotions than facts.
• Even though a stock split can make things feel better for investors in the short term, it’s important to remember that the true value of an investment comes from the company’s performance, not just the number of shares owned.

Wrap Up

Stock splits can be a great opportunity for investors, especially when companies like Nvidia, Microsoft, and Meta are involved. A stock split makes shares more affordable and can attract more investors. However, it’s important to remember that a stock split doesn’t change the value of the company. The real growth comes from how well the company performs. Keep an eye on these companies, but always focus on their long-term success, not just the number of shares you own.

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Disclaimer:

Remember, this analysis is for informational purposes only and should not be considered financial advice. Always conduct your own research or consult a financial advisor before making any investment decisions.