When stocks continue to rise to a level where the management thinks it has become a high dollar amount, they tend to announce a stock split. It will split the share count and reduce the stock prices. A stock split will not change the fundamentals of the company but it will impact the stock price. Existing shareholders are given additional shares for each share they held prior to the split. It helps attract retail investors and improves trading liquidity.
Certain stocks continue to soar even after a split and such companies are worth owning. They show their strength and continue to roar higher, despite market volatility. I’ve picked one split stock that is a steal even today. If you had missed buying the stock at the time of the split, buy it before it moves higher. In this article, we’re going to dive deeper into the tech stalwart Nvidia (NASDAQ:NVDA) and the catalysts working for it.
Key points in this article:
- Nvidia is one of the best split stock to buy in 2025.
- The current dip in the stock is a tempting opportunity to own a fantastic business.
- If you are looking for more AI stocks, grab our free “The Next NVIDIA” report. It includes a software stock with 10X potential.
Market concerns are overblown
Trust me when I say this, Nvidia is a brilliant business and any opportunity to buy the stock should never be missed. NVDA stock has rallied over 1,500% in the past five years. The stock has split several times in the past and it recently underwent a 10 for 1 split. It was trading at 1,210 when the company split stock. It started trading at $120 after the split.
While the stock hasn’t shown impressive returns after the 2024 split, there is a lot more to come from this tech giant. Nvidia has delivered eye-popping returns since 2022 and it has transformed the face of the company. Despite the DeepSeek concerns, CEO Huang is positive about the future of the company and expects the demand for GPUs to keep growing.
Currently, Nvidia is one of the lower-priced stocks trading at $110. It has entered the bear territory and is down 20% year-to-date. This dip should be considered as an opportunity to load up on this stock. A leader in the artificial intelligence industry, Nvidia has a massive market to cater to and investors’ fears about the drop in AI demand are overblown. The company has a GTC event scheduled for later this month and the new announcements could give the stock a boost.
AI King for a reason
Some of the biggest companies have announced an increase in AI spending for 2025 and this means bigger business for Nvidia. Even if all the money does not go to Nvidia, at least some part of it will. Meta Platforms Inc. (NASDAQ: META), Microsoft (NASDAQ:MSFT) and Alphabet Inc. (NASDAQ: GOOGL) are Nvidia customers and they have announced a higher capital expenditure for the year. These companies will help Nvidia see strong revenue growth.
Nvidia has established a niche for itself in the industry and despite rising competition, no other company has been able tocome close to its success. No AI company can beat Nvidia when it comes to products and fundamentals. The company has set a gold standard in the industry which is hard to beat.
Solid fundamentals
Fundamentally, Nvidia is in an excellent position. It reported a revenue of $39.3 billion, up 78% year-over-year, and a data center revenue of $35.6 billion, up 93% year-over-year. It reported a gross margin of 73% for the fourth quarter and a margin of 75% for the full year. The AI king reported an EPS of $0.89, up 71% year over year.
The company has managed to beat expectations in each quarter throughout 2024 and strong results have led the stock to rally. Its latest chip, Blackwell generated $11 billion in revenue in the fourth quarter, making it one of the most successful products in the company’s history. This shows that Nvidia has the potential to innovate and push the boundaries of a product. The stock looks undervalued to me and is a buy at every dip. Wall Street is bullish on the stock with an average price target of $171, a 60% upside from the current level.
Nvidia will easily continue to dominate the market throughout 2025 and we will see the stock move higher. Looking at the sky-high margins and the impressive history, NVDA stock looks cheap to me. Any sell-off in the stock is a buying opportunity and this split stock is one of the best in history. It’s worth holding the stock for the next three to five years for solid gains but do not expect another stock split anytime soon.
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