2 Artificial Intelligence (AI) Stocks That Look Like They're Ready for a Split

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Many top technology stocks have completed stock splits in recent years. Amazon to alphabet, their stock soared. This move involves a company issuing additional shares to current holders in order to lower the price of individual shares. While this does not change a company's market or investment value, it does benefit the company by making its shares more accessible to a wider range of investors.

And for investors, stock splits often signal that a company is doing well and that management expects that momentum to continue, which can push the stock price up again over time. So it's worth keeping a close eye on split-stock companies, as some may make interesting long-term investments.

Companies that are good candidates for spin-offs are often active in high-growth industries and have rapidly rising stock prices, sometimes reaching the $1,000 level. This is currently the case for two artificial intelligence (AI) stocks. They haven't announced their breakup, but given their great performances over the past few years, I wouldn't be surprised if they break up in the near future. Let's take a closer look at these AI stocks that look ready for a split.

Investor is working from home using a laptop.Investor is working from home using a laptop.

Image source: Getty Images.

1. Nvidia

Nvidia (NASDAQ:NVDA) The company has established itself as the world's leading AI chip, and its stock price has risen 500% in the past three years. The company sells graphics processing units (GPUs) that power AI model training and inference, the most critical step in any AI project. This allows these models to do what we want them to do, such as solve complex problems.

The tech giant's GPUs were initially known for powering video games and graphics, but the introduction of the programming platform CUDA has made it easier to use GPUs for general computing, and for AI. The door to use has been opened. Nvidia now derives most of its revenue from its data center business, rather than from its video game business. Sales and profits soared by triple digits last year, and given that we're in the early stages of the AI ​​boom, growth is likely to continue.

Nvidia has split its stock five times in the past, with the most recent split occurring in 2021 after a period of rising stock prices, when the stock was trading below $250.

Nvidia stock has risen above $900 this year and is very close to the $1,000 level, which could deter some investors from buying the stock. Given the current stock price and the fact that new growth drivers may be on the horizon, now could be the perfect time for the AI ​​star to initiate a stock split. The company plans to release a new Blackwell architecture and chips later this year, and growth from that platform could give Nvidia stock a big boost.

2. Super microcomputer

super microcomputer (NASDAQ:SMCI) Recently, its share performance has skyrocketed to the point where it even surpasses Nvidia. The stock price has soared more than 2,200% over the past three years, peaking above $1,000 earlier this year before falling to its current level of about $940.

Like Nvidia, Supermicro has seen its revenue streams change thanks to demand for AI. The 30-year-old company, a maker of servers, full rack-scale solutions and other equipment, just recently announced its first-ever $3 billion quarter as AI customers flock to its products. Supermicro works closely with top chip manufacturers, including Nvidia, to quickly integrate their products into their platforms, which continues to drive record surges in demand.This is because Supermicro not only releases its own new products, but also from Nvidia. intel and Advanced Micro Devices.

Customers love Supermicro's products because they are specifically tailored to their needs, and the company's built-in construction allows them to quickly fill orders.

Supermicro's revenues have skyrocketed in recent years, and the company is making moves to maximize economies of scale to continue the boom. The tech giant is achieving this by expanding production at a new facility in Malaysia to focus on reducing costs and increasing production.

Supermicro has never done a stock split, but given its current stock price and the potential for a new wave of growth down the road, now might be the best time to do so.

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Alphabet executive Suzanne Frye is a member of The Motley Fool's board of directors. John Mackey, former CEO of Amazon subsidiary Whole Foods Market, is a member of the Motley Fool's board of directors. Adria Cimino has a position at his Amazon. The Motley Fool has positions in and recommends Advanced Micro Devices, Alphabet, Amazon, and Nvidia. The Motley Fool recommends Intel and recommends the following options: These are a long call on Intel at $57.50 in January 2023, a long call on Intel at $45 in January 2025, and a short call on Intel at $47 in May 2024. The Motley Fool has a disclosure policy.

Stock Split Watch: 2 Artificial Intelligence (AI) Stocks That Look Like They're Ready for a Split was originally published by The Motley Fool.

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