Better Stock-Split Buy: Nvidia vs. Super Micro Computer
Investors love a good stock split, and here's why. While these maneuvers don't change the value of a company, they do bring down the per-share price of high-flying stocks, making the purchase of full shares more accessible to a broader range of investors.
In a 10-for-1 stock split of a stock trading for $1,000, for example, you would only have to invest $100 to get a share of the company post-split. The company has more shares selling for a lower price, but its overall market cap has not changed and individual investors still own the same dollar amount of stock. When a company splits its stock, it also shows a certain degree of optimism about the future, with the idea that the stock will once again take off and even potentially return to earlier levels.
Stock splits have flourished in recent times, led by major companies across industries. And the tech industry, which accounted for a great deal of Stock gains in the first half of the year, has been a big part of the story. Among these companies are two leading artificial intelligence (AI) players, Nvidia (NASDAQ: NVDA) and Super Micro Computer (NASDAQ: SMCI).
Source Fool.com
