While Nvidia (NASDAQ:NVDA) shares have dropped in the Friday session, nothing can take away from their performance over the past year. Thanks to soaring demand for artificial-intelligence-related applications, Nvidia’s sales for its graphics processors have skyrocketed. The subsequent intense rise of NVDA stock raises the prospect of a share split.
At time of writing, NVDA stock trades just below the $900 level. However, earlier this morning, it peaked above $973, achingly close to the $1,000 level. Of course, that’s a major milestone, but it also raises psychological and administrative barriers. Essentially, a $1,000 stock is extremely expensive for the average retail investor, irrespective of the underlying fundamentals.
Further, for brokerages and platforms that may not allow fractional ownership, buying NVDA stock directly may be difficult for investors. So, a split may make sense to promote accessibility.
NVDA Stock a Possible Candidate for a Share Split
Adding to the pressure for a share split is the belief that, for some experts, NVDA stock hitting $1,000 is an inevitability. For example, Mizuho analysts earlier this week raised their price to $1,000, calling Nvidia the “biggest near-term AI winner.”
Mahoney Asset Management President and CEO Ken Mahoney chimed in, telling Bloomberg News that he anticipates a stock split fairly soon. “Probably in the next year or so, I expect the stock to split and that would be able to get some small retail investors into the stock where they think it’s out of reach right now,” Mahoney said.
Notably, Nvidia last announced a 4-for-1 stock split in May 2021. At the time, shares were priced at around $600. Back then, the justification for the decision was to “make stock ownership more accessible to investors and employees.”
Why It Matters
Overall, analyst enthusiasm remains robust, with the consensus view standing at strong buy. This assessment breaks down as 39 buys and two holds. Further, the average price target stands at $893.86. However, the most optimistic target tracked by TipRanks calls for a price per share of $1,200.
On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
