On June 7th, Nvidia will undergo a stock split, causing each share to become ten. While stock splits typically just lower the share price to facilitate smaller trades, this move by Nvidia has investors celebrating. This indicates the tremendous growth in share price that has prompted the need for the split. In comparison, two years ago, both Alphabet and Amazon split each of their shares into 20, giving their investors many reasons to celebrate as well.
Traditional valuation measures like dividend yields are now considered outdated when it comes to assessing the performance of big tech companies. Amazon has never paid a dividend, while Alphabet is set to pay its first ever dividend on June 17th. Nvidia, post-split, will offer a mere one cent per share in quarterly dividends. These payouts are a far cry from explaining the impressive returns that investors have seen from these companies.
Investors in Nvidia, Alphabet, and Amazon have seen significant growth in their investments, with stock prices soaring and traditional valuation measures failing to explain the phenomenon. The upcoming stock split for Nvidia is just the latest event in this ongoing success story for the company and its investors.
Overall, the stock split for Nvidia is a notable event in the company’s history, signifying the significant growth in share price that has necessitated the split. While this may not directly impact the value of investors’ holdings, it is a notable milestone for the company and its backers. The increasing share prices of big tech companies like Nvidia, Alphabet, and Amazon have made traditional valuation measures obsolete, as dividend yields and other metrics fail to capture the true value of these stocks. Investors continue to benefit from the impressive growth of these companies, despite the lack of traditional explanations for their success.
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