NVIDIA, the king of GPUs, announced this week that it will split its stock, allowing more retail investors to join the NVIDIA army.
On the 22nd, NVIDIA took the opportunity of releasing its new financial report to announce a &#34;1-for-10&#34; stock split plan, which will take effect on June 7th. At that time, NVIDIA shareholders will receive an additional 9 shares for each common share, marking NVIDIA's second stock split in recent years.
A recent report released by Bank of America pointed out that NVIDIA's stock split may signal the beginning of a new trend for technology companies to split their stocks.
The report from Bank of America focuses on 36 companies in the S&amp;P 500 index whose stock prices are over $500, considered high-priced stocks and potential candidates for stock splits. Technology companies like Broadcom, AMD, Netflix, and ServiceNow are among the main candidates, as well as the online travel giant Booking with a stock price close to $3800, and pharmaceutical companies like Eli Lilly and Regeneron.
Meanwhile, Microsoft and Meta, part of the &#34;Big Seven&#34; in the US stock market, are also approaching the $500 mark. The next stock split is likely to involve these leading players.
Why compile a list of potential stock split candidates? This could be the key to future wealth.
Bank of America pointed out that historically, stocks have seen an average return of about 25% in the 12 months following a split announcement, compared to an index return of around 12% during the same period. After Apple's 4-for-1 split in 2020, the stock price rose by over 30% in the following year.
Although a stock split does not change a company's market value, it often occurs when a company is expanding continuously and has a promising profit outlook. At this time, investors have strong confidence in the company's stock price, and the post-split stock price will decrease, attracting more retail investors. Therefore, fundamentally strong companies often see an increase in stock price in the short term after a stock split.
However, such excess returns may not always materialize, as Tesla dropped by 6% in the year following its stock split in 2022. This means that continued growth after a stock split is also a probabilistic event

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Bank of America believes that after NVIDIA announced a 1-for-10 stock split plan, high-priced tech stocks such as Broadcom, Netflix, and AMD may also become candidates for the next round of stock splits. Could there be a hidden wealth code behind this?

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Splitting stocks! NVIDIA is just the first one, more tech stocks are coming up next