Nvidia Corporation (NVDA) announced that the board has declared a 4 for 1 stock split in the form of a stock dividend to make its shares more accessible to a larger number of employees and investors.
The proposed split will increase the chipmaker’s outstanding common shares to 4 billion. Shares of the company jumped 2.6% to close at $599.67 on May 21.
Nvidia is a global technology company that designs and manufactures computer graphics processors, chipsets, and related multimedia software.
The split is conditional on approval from shareholders at the company’s Annual Meeting to be held on June 3. Upon approval of the split, each shareholder of Nvidia as of June 21, will receive a stock dividend of 3 additional common shares for every share held. The shares are to be distributed after the close of trading on July 19, and trading on the newly split shares will begin on July 20. (See Nvidia stock analysis on TipRanks)
In its most recent Q4 earnings report, the company reported full-year 2021 revenue and earnings of $16.68 billion and $10 per share, up 53% and 73% year-over-year respectively.
Anticipating a robust performance in the upcoming Q1 report, Oppenheimer analyst Rick Schafer maintained a Buy rating on the stock with a price target of $700, which implies 16.7% upside potential to current levels.
Schafer said, “Nvidia has transformed from a graphics company to becoming a premier leading AI computing platform company. The GPU was initially used to create graphics for video games and film. Today, its parallel processing capabilities, supported by thousands of computing cores are essential for deep learning AI algorithms in data centers. Through its Mellanox acquisition, NVDA expanded its DC footprint from AI-accelerators to providing highspeed networking interconnects. We see several structural tailwinds driving sustained outsized top-line growth: gaming, data center/ AI accelerators, and autonomous vehicles.”
Nvidia’s shares have gained 72% over the past year, while the stock still scores a Strong Buy consensus rating based on 24 Buys and 2 Holds. The average analyst price target is $685.43, which implies 14.3% upside potential to current levels.
TipRanks data shows that financial blogger opinions are 92% Bullish on NVDA, compared to a sector average of 69%.
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