FILE PHOTO: Traders work on the floor at the New York Stock Exchange in New York City, U.S., May 17, 2024. REUTERS/Brendan McDermid/File PhotoNEW YORK : Nvidia's plan to split its stock after the stunning rise in the chipmaker's share price could lure more interest from retail investors while potentially paving the way for the company's inclusion in the Dow Jones Industrial Average.
For Nvidia, the third-largest U.S. company by market value, the stock split could spark more interest from individual or retail investors, analysts said. The chipmaker's shares have already more than doubled so far in 2024. Nvidia's lead in the AI boom already has made it the most popular stock among individual investors over the past year. The stock is the highest weight in the average retail trading portfolio at 9.3 per cent, followed by Apple at 9.2 per cent and the SPDR S&P 500 ETF at 7.8 per cent, Vanda said in a note issued on Wednesday. A year ago, Nvidia made up 4.2 per cent of the average portfolio.
But a stock split alone is unlikely to overcome the host of other factors that can sway stocks. Shares of Amazon and Alphabet fell sharply in 2022 even though the companies both announced splits during the year, as surging interest rates weighed on stocks broadly. Similar speculation about Dow inclusion followed Amazon's split in 2022. Amazon was added to the Dow earlier this year.