by Anura Guruge
on June 6, 2024
Yes, over the short-term, the next few months, it will be WILD. NVDA might go up another 40%. But, that is when things will get ‘interesting’ — & possibly ‘ugly’.
The 10:1 stock split, which will make NVDA extremely AFFORDABLE, would have attracted a different type of investor/trader to those we have now (when the stock is expensive).
These many of these new investors will prove to be FICKLE. Many might also not have the resources to hold onto stock long term. Basically, we will see more selling. This is what happened to AMZN & GOOG after their 2022 splits.
When NVDA was ‘expensive’, especially once it passed the $900 mark, you needed to be relatively well healed to buy one share of stock. Once it is in the $100 range, post split, $900 will get you 9 shares. Scale that up & you will see the problem. ‘Kids’ could buy 100 shares & start option trading. They can & will trade willy-nilly. No strategy, no discipline, no regrets. Thus, we will get volatility.
Yes, NVDA as a company will continue to EXCEL & outperform others. So, that will help promote upward momentum — but the ‘kids’ will then get tempted to sell their shares.
So, bottom line is that the NVDA stock split might prove not to be as GREAT as we would have hoped for.
