Bank of America believes that after Nvidia announced a split plan of 1 split of 10, high-priced technology stocks such as Broadcom, Netflix, and ultra-microcomputer may also become candidates for the next batch of stock splits. Maybe there is a wealth code hidden behind this?
Nvidia, the king of GPUs, announced a stock split this week, and more retail investors will be able to join Nvidia's army.
On the 22nd, Nvidia took the opportunity of announcing the new financial report to incidentally announce the “1 split 10” plan, which officially came into effect on June 7. At that time, Nvidia's shareholders will receive an additional 9 shares for each common share. This is also the second time in recent years that Nvidia has split shares.
According to a recent report released by Bank of America, Nvidia's stock split may mark the beginning of a new trend of technology company stock splits.
Bank of America focused on the report$S&P 500 Index (.SPX.US)$The 36 companies in it all have stock prices over 500 US dollars. They are high-priced stocks and are potential candidates for stock splits, such as$Broadcom (AVGO.US)$,$Super Micro Computer (SMCI.US)$,$Netflix (NFLX.US)$und$ServiceNow (NOW.US)$Technology companies are the main players, as well as online travel giant Booking, with a stock price close to 3,800 US dollars, and$Eli Lilly and Co (LLY.US)$Pharmaceutical companies such as Regenerative Pharmaceutical, etc.
And the US stock “Seven Sisters”$Microsoft (MSFT.US)$und$Meta Platforms (META.US)$It's also close to the $500 club. The next stock split is likely to fall on these seed players.
Why make a list of potential stock splits? This could be the password for the future of wealth.
Bank of America pointed out that historically, stocks can achieve an average return of about 25% within 12 months after announcing the split, while the index return for the same period was about 12%. After Apple split 4 in 2020, the stock price rose by more than 30% in the following year.
Because although a stock split does not change the market value of a company, a stock split often occurs when the company continues to expand and profit prospects are great. At this time, investors have strong confidence in the company's stock price, and the stock price after the split will drop, which can attract more retail investors to enter the market, so in the short term after the stock split, companies with good fundamentals can often increase their stock prices.
However, this kind of excess income will not necessarily occur.$Tesla (TSLA.US)$After the stock split in 2022, it fell 6% within the following year. This also means that after the stock split, the stock price may continue to strengthen, or it may make a U-turn. It is also a probabilistic event that it will continue to rise after the stock split.
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