Nvidia Video 21.05.21.

Nvidia Announced A Four-For-One Split Of Its Stock

Shares of Nvidia opened with a gap up today after the company announced a four-for-one split of its common stock. The company stated that the move will make stock ownership more accessible to investors and employees.

In case the split is approved by the company’s shareholders at the annual meeting on June 3, 2021, each NVIDIA shareholder of record at the close of business on June 21, 2021 will get three more shares of Nvidia’s common stock.

The company anticipates that the stock would begin to trade on a split-adjusted basis on July 20.

With the price of roughly $600 per share, Nvidia stock is not easily accessible to some investors who do not have a big account and want to hold a diversified portfolio. When the price of one share drops after the split, the stock will become more attractive for a larger pool of potential investors, which is bullish for Nvidia.

What’s Next For Nvidia?

Nvidia is expected to report its quarterly results on May 26, after the market close. Analysts expect that the company will report earnings of $3.27 per share. For the full year 2021, Nvidia is expected to report earnings of $13.59 per share, while the company’s earnings are projected to grow to $15.37 per share in 2022.

At current levels, the stock is trading at 39 forward P/E for 2022 which is not cheap. However, such valuations are often seen in high-flying tech stocks.

The company’s graphic cards experienced huge demand from crypto miners at the beginning of this year, and Nvidia was even forced to reduce hash rates at some cards so that these cards can find their way to gamers. General supply shortages in the semiconductor industry have also provided support to the company’s shares this year.

At this point, the main risk for Nvidia is presented by rising interest rates which could put pressure on tech stocks. However, bond traders have managed to shrug off inflation worries in recent weeks, and Nvidia’s shares have a good chance to gain momentum ahead of the earnings release.

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For a look at all of today’s economic events, check out our economic calendar.

This article was originally posted on FX Empire


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