July 16, 2024

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Nvidia Completed Its 10-for-1 Stock Split. These 2 Artificial Intelligence (AI) Stocks Could Be the Next Stock Splits

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Stocks that split tend to beat the S&P 500 (SNPINDEX: ^GSPC), according to research from Bank of America. Since 1980, the average company has seen its share price increase 25.4% during the 12 months following a stock split announcement, while the S&P 500 has returned an average of 11.9% during the same period.

Nvidia is the most recent company to follow that pattern. Since announcing a 10-for-1 stock split on May 22, its share price has surged 43%, while the S&P 500 has returned just 3%. Nvidia’s success is due to its market leadership in artificial intelligence (AI) chips and its expanding influence in other areas of the AI economy.

Super Micro Computer (NASDAQ: SMCI) and Microsoft (NASDAQ: MSFT) also play important roles in the AI economy, and they could be the next companies to announce stock splits. Here’s what investors should know.

1. Super Micro Computer

Super Micro Computer designs and manufactures high-performance computing platforms for enterprise and cloud data centers. Its products include individual servers and full-rack solutions purpose-built for AI applications. Supermicro has a deep relationship with Nvidia, but it also sources chips, memory, and other hardware from suppliers like Advanced Micro Devices, Broadcom, and Intel.

Dell Technologies leads the server market in sales, but Supermicro is an early frontrunner in the AI server subcategory due to its unique building-block approach to product development. Specifically, the company can quickly integrate the latest chips and hardware into preassembled server building blocks, and it handles most development in-house. The upshot is that Supermicro can usually bring new technologies to market more quickly than its rivals.

Supermicro also affords customers more flexibility in creating customized computing platforms. Its building blocks can be assembled in countless combinations, such that it has one of the broadest and deepest portfolios of advanced server and storage solutions in the IT industry. CEO…

2024-06-20 04:44:00

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