Forget the Stock Split, Here's the Real Reason to Invest in NVIDIA Stock
NVIDIA (NASDAQ: NVDA) shares are now up 240% since the start of 2020. Sales of the company's GPUs (graphics processing units) are booming for high-end video gaming and for data centers, riding a massive upgrade cycle and global shortage of chips in the wake of pandemic lockdowns last year. With AI and all of its many use cases only just beginning to reshape the business and personal computing landscape, this is a top semiconductor stock to own for the decade ahead.
But let me offer some counterpoints. Yes, I'm as bullish as ever on NVIDIA's long-term potential, but the most recent stock price surge (up 30% in the last month alone) has me scratching my head. It could be the result of the company's stellar quarterly earnings update at the end of May, but those results were no surprise. After all, management had been signalling for a while now it expects its torrid double-digit percentage pace of sales to continue through the rest of this year. Rather, I have a suspicion that this latest jump has more to do with the four-for-one stock split that was announced just days before the last quarterly update, and approved by shareholders to take place on July 19.
If you weren't planning on buying (or adding to an existing position) a month ago, but are wanting in now because of FOMO (fear of missing out), take pause. NVIDIA is a long-term investment powerhouse, not a short-term one.
Source Fool.com
