Title: Exploring Artificial Intelligence Stocks that Underwent Splits in 2023: Will They Expand in 2025?
The S&P 500 has been on a bull run this year, with the benchmark nearing a 26% gain. The tech-heavy Nasdaq and the Dow Jones Industrial Average are also seeing impressive gains of 29% and 18% respectively. The growing hype around artificial intelligence (AI) has been a major theme, with investors pouring money into AI players, expecting the technology to revolutionize various industries and boost earnings in the long term.
The AI market, currently valued at $200 billion, is projected to reach a trillion dollars by the end of the decade. The excitement around AI has led to gains in AI stocks, some of which have reached astronomical levels, making them inaccessible for smaller investors. This is where stock splits come in - a mechanism that reduces the share price by issuing more shares, making the stock more affordable for a larger pool of investors.
Three top AI players have undergone stock splits this year. The most anticipated one was from Nvidia (-3.00%), which implemented a 10-for-1 split, causing its shares to surge 12% in the following trading sessions. Nvidia's focus on AI and its leadership in the AI chip market have fueled its stock's 2,600% increase over the past five years. With a range of upside potential, some analysts believe Nvidia's stock could still climb in 2023, especially with the launch of its Blackwell architecture.
Broadcom (-2.18%) also introduced a 10-for-1 split in July, lowering its share price from around $1,600 to $160. Broadcom's shares have soared due to its growth in the AI market, climbing 50% year to date. The networking giant's AI products have witnessed a surge in demand, particularly from cloud service providers. Broadcom expects to see a significant increase in its AI revenues, aims to capture a growing AI market opportunity, and trades at a reasonable forward P/E ratio.
Super Micro Computer (-0.03%) experienced a 188% gain in the first half of the year but saw its stock prices plummet after a short report pointed to troubles at the company. Supermicro's stock price then fell further due to its delay in financial reporting and potential Nasdaq delisting. Despite the setbacks, the company's revenue and demand for its products have remained strong. Supermicro specializes in direct liquid cooling technology, which could be another growth driver for the company, but its financial reporting situation will likely determine its future performance in 2025.
Investors continue to allocate significant funding towards AI-related companies, recognizing the immense potential for growth and finance gains in this sector. The recent stock splits by Nvidia, Broadcom, and Super Micro Computer make these tech giants more accessible for a broader investor base, potentially attracting more capital into their AI initiatives.
