Stock splits can provide some interesting investment opportunities. Often, they can make full shares more accessible, which often leads to a boost in trading volume (though not always). It’s important to remember that a stock split doesn’t magically increase a company’s value, though. It only spreads that value out through more stocks!

With a limited investment of $500, targeting stocks that have recently undergone splits might seem promising. However, you must still pay attention to a company’s fundamentals and future growth prospects. There are still poor investments you could make!

We’ll explore some companies that have recently undergone stock splits below, diving into their business models and financial performance. We’ll also take a look at companies that will probably have a stock split soon, allowing you to watch out for stock splits as you’re investing.

1. NVIDIA

NVIDIA (NASDAQ: NVDA) is a technology company focusing on graphics processing units (GPUs). These are utilized for gaming, data centers, and even Bitcoin mining. These processors are very fast at processing information, which is why they’re used for more data-heavy purposes.

NVIDIA has been a great performer recently. GPUs have surged in demand, and NVIDIA is one of the most popular creators of these processors. As gaming and AI take off, more and more people need great GPUs. Their stock has gained more than 200% over the past year, and their recent stock split has made them more affordable.

This company has a very strong market position with its GPUs, especially considering the rising AI industry. They have a high valuation compared to historic levels, though. Many wonder how much higher NVIDIA can rise realistically. Like with any tech company, this one does tend to be more volatile than others!

We expect NVIDIA to expand into even more markets in the future. The biggest strength of their GPUs is that they can be used for many data-oriented tasks. As the tech world develops, more data-oriented tasks may arise, and NVIDIA’s GPUS may also fulfill these unforeseen needs. NVIDIA’s huge jump in profits recently is largely due to the company’s diversity.

Of course, other companies are also looking to grab the GPU market. Competition with AMD and Intel may affect how well NVIDIA will do in the future, though they remain a front-runner for the moment. For more information on NVIDIA competitors, read our newest report, “The Next NVIDIA.”

2. Alphabet

Alphabet (NASDAQ: GOOGL) is the parent company of Google, one of the world’s largest internet search engines and advertising platforms. While you probably know Google best from, well, Google, they also own several other platforms, like YouTube and cloud computing. They’re much more diverse than just Google.

Alphabet has also had great financial results for the past several years. They’re the dominant company in search advertising, and YouTube has grown substantially. The stock split aimed to increase liquidity and accessibility.

Alphabet’s biggest strength is its brand recognition. Just about everyone knows what “Google” is, and it has even become synonymous with “search.” They have a massive user base, so they probably aren’t going anywhere anytime soon!

That said, they have come under some regulatory scrutiny lately, and some competitors have popped up in some industries. For instance, cloud computing is extremely competitive.

Of course, Alphabet has dealt with many of these things before. Despite the potential for government crackdowns and competitors, it’s a very strong company to invest in.

3. Tesla

Tesla (NASDAQ: TSLA) is a leading electric vehicle (EV) manufacturer and clean energy company. It has seriously disrupted the automotive industry with its electric vehicles and is easily one of the best-known AV manufacturers in the US.

Tesla’s stock has always been volatile, even considering its tech focus. Despite this, many investors love them. There is a strong brand loyalty towards Tesla.

That said, Tesla has a very strong reliance on Elon Musk, it’s founder. There isn’t much evidence of the company’s performance after Elon Musk. Many Tesla fans are better described as Musk fans.

Economic downturns tend to affect Tesla substantially. Battery supply constraints and regulatory hurdles can also have a huge effect on the company, so it isn’t without potential threats. New EV manufacturers are popping up all the time, too.

4. Amazon

Amazon (NASDAQ: AMZN) is a huge e-commerce giant with a dominant market share in online retail. Similarly to Google, just about everyone knows what Amazon is and probably uses it regularly. On top of online retail, it has also expanded into cloud computing, digital streaming, and other growing industries.

Amazon has been consistently growing, thanks to the rise of e-commerce. As the company continues expanding into new industries, it’s expected to grow even further in the future. While it hasn’t undergone a stock split recently, its high share price often makes it a candidate for discussion. There is a strong possibility that it will do a stock split in the future.

Not everything is great with Amazon, though. Many argue that the company has a high valuation, and the potential for competition is high. Still, Amazon has been growing in advertising and its subscription services, which can potentially lead to more growth opportunities in the future.

Economic downturns can potentially hit Amazon hard, though. It can directly impact consumer spending, which is never a good thing for Amazon.

5. Meta Platforms

Meta Platforms (NASDAQ: META) was previously known as Facebook. This social media giant owns Facebook, Instagram, WhatsApp, and several other popular platforms. Its main revenue source is advertising on these platforms, which is becoming an increasingly popular way to advertise.

In recent years, though, Meta has faced challenges. Privacy concerns and changes in legislation are their biggest challenges, and these may only heat up in future years. Still, Meta is the driving force in social media. They have a huge user base and a very strong advertising platform.

One large if surrounding Meta is the development of the metaverse, which is why the company changed their name to begin with!

6. Netflix

Netflix (NASDAQ: NFLX) is a global leader in the streaming industry. They offer a vast library of TV shows, movies, documentaries, and original content. This is the company that revolutionized the entertainment industry by providing on-demand access to shows and movies when everyone else was still only offering live shows.

Like many stocks on this list, just about everyone knows what Netflix is! It has an extremely strong brand recognition and global reach. Because it’s been around for so long, it has a massive content library, too.

However, competition in the streaming space is intense. There is a high churn rate, which is the rate at which subscribers unsubscribe. People are very quick to cancel their Netflix subscriptions. It’s even a common cost-saving measure to shuffle through different subscription services, watch what you want, and then cancel.

Economic downturns are also likely to affect Netflix directly, as many users consider it an “optional” expense. The cost of creating content is also rising, and the bar is constantly being raised as all the streaming companies compete with each other.

3 Things to Remember When Investing in Stock Splits

While stock splits get a lot of buzz, it’s important not just to jump into investing in any of the companies we mentioned above. Here are three crucial reminders when you’re looking to invest in a recent stock split or a company that may undergo a stock split soon:

• Stock splits don’t change the underlying value of a company. They just cut the stock up into smaller pieces, but the total value remains the same. Each stock is just smaller.
• Past performance is not indicative of future results. Companies typically undergo stock splits because they’re performing so well that their stock price has grown very large. However, that doesn’t mean the company will continue growing at the same speed.
• Diversification is key. Don’t just choose one of the companies above and invest all of your money into it! Instead, spread your money out into a few different stocks.

Always do your own research when investing in a company, especially recent news and developments.

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