Nvidia Announces Stock Split to Make Shares More Affordable for Investors

Nvidia, the chip company, recently announced a stock split where each investor will receive nine additional shares for every one they own. This move aims to make Nvidia's stock price more affordable for employees and investors, as a lower stock price can sometimes benefit investors. The company's stock price is expected to decrease by approximately 90% after the split, but each investor will still maintain the same total investment value. Research suggests that companies like Nvidia tend to experience continued stock price growth after a split, with historical data indicating a 25% total return in the 12 months following the announcement. While some companies, like Tesla, saw a decline in stock price after a split, others experienced significant gains, highlighting the unpredictable nature of the stock market. Stock splits offer companies an alternative to share repurchases to benefit shareholders, especially in high market conditions. Several companies, including Walmart and Chipotle Mexican Grill, have already announced stock splits this year.