No one would be stupid enough not to after NVIDIA with share split

There is no hindsight. I have often emphasized in my discussion group since last year that if NVIDIA’s stock price rises to more than 800 US dollars, a share split will be inevitable. And my subtext is that once the stock is split, its future stock price will skyrocket.

It’s finally coming, NVIDIA is breaking its every share down to ten. However, I see a lot of opinions on the Internet, with which the commentators urge everyone not to follow blindly to buy the share because of split. 

I think the primary blindness has closely to do with that analysis, not the people to be advised. 

Even without the split, I keep emphasizing that in the next few years, artificial intelligence will continue to dominate in technology, and NVIDIA is a strong player in this field. The company has certain advantages and its business is of very real value. I guess it is worth even $2,000 per share. Then, if the company split the price by 10, it would cost US$200 per share in future. If we after the share currently at about US$100, is this called blind chasing?

You understand what I mean? What I mean is: Even if NVIDIA does not break down, it has a second wave and a third wave of upward trend, and the second wave is coming! And breaking the share down has the effect of fueling the flames.

It is a traditional wisdom: The split has greatly reduced the entry barrier for retail investors, thus attracting more individual investors to pursue it. The increase in stock liquidity makes the relevant stock prices even higher!

I understand! Today, U.S. retail investors can buy and sell less than 1 share at a time (U.S. securities firms provide fractional share trading services), so for U.S. investors, the entry threshold has already been lowered; but what about foreigners? There are  many foreigners buying NVIDIA, and Hong Kong people here, like us, really think that 8,000 Hong Kong dollars  per share of NVIDIA is very expensive. If we can buy at one tenth of the price, we are no longer expecting too much for the end of the month buying it with salaries. 

I have said that investing is like opening a real store, let’s say, to sell cigarettes. A package of cigarettes are expensive. In case smokers have a compulsory need for smoking, I better dismantle the packages and sell them one by one.  Then, their desire is met, and in return a bit higher price for every piece of cigarettes is charged. This is the value of share split. 

Admittedly, stock splits may not necessarily cause stock prices to rise, so don’t do junk stocks! But what I am talking to you is about NVIDIA, an advanced company that holds the leading position in technology today. If you have reservations about what I said because you are afraid that the breaking-down may not cause its stock price to rise. It means you might consider NVIDIA an unwanted stuff………

It seems not quite convincing.