There is information that the American manufacturer of graphics processors and microcircuits NVIDIA plans to split the shares (split). Let’s find out in more detail what exactly is happening, how the quotes react to it and what our analyst Maxim Artyomov thinks about it.
Split NVIDIA shares
On May 21, it became known that the NVIDIA board of directors decided to split the company’s shares in a ratio of 1 to 4. This means that the value of the security will decrease fourfold, and the shareholders will get three more for each share held.
Recall that the current price of securities is around $ 600 per unit. After the split, the cost will be approximately $ 150, which will make the chip manufacturer’s shares more accessible to investors.
However, the decision of the board of directors must be approved at the meeting of shareholders, which will take place on June 3. The holders of the assets of the American corporation will be able to ask questions, express their opinions and vote. If they support the splitting decision, then the bidding, taking into account the adjustment, will begin on July 20, 2021.
NVIDIA shares have risen in price
NVIDIA Securities (NASDAQ: NVDA) have been increasing for three consecutive sessions. On May 19, they added 0.36%, climbing to $ 562.63. The next day, the growth was 3.89%, to $ 584.5. After the news of the split was published, the corporation’s quotes rose 2.6% to $ 599.67.
Technical analysis of NVIDIA shares from Maxim Artyomov:
“Against the background of the expectation of the split, the company’s securities continue to rise. Quotes, having rebounded from the support level, are moving to the area of the next resistance level. Given that the price is still above the 200-day moving average, it can be assumed that the historical maximum will be updated before the split. …
The next target for growth is the $ 650 mark. After the split in a 1: 4 ratio, the price tag will become more accessible to investors and there will be many people willing to invest in the corporation’s securities, which, in turn, will provoke further growth in quotations. “
Awaiting the quarterly report
On May 26, NVIDIA will report for January – March 2021. The consensus forecast for the value of the securities is $ 663.88 per unit. As for the size of revenue, analysts expect an indicator equal to $ 5.4 billion. The forecast for net earnings per share reaches $ 3.28.
According to John Vinh, KeyBanc Capital Markets expert, the corporation can be called the best in the industry of artificial intelligence, machine learning and data processing software. Therefore, he changed the target price for the company’s shares, increasing it to $ 700, and retained his previous recommendation – “Buy”. Raymond James analyst Chris Caso raised the target price from $ 700 to $ 750.
Summing up the result
NVIDIA’s board of directors a few days before the publication of quarterly reports announced a 1: 4 split of securities. This decision must be approved at a shareholders’ meeting. If they support the split, then the adjusted bidding will begin on July 20. This news triggered a 2.6% rise in the tech corporation’s quotes.
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