Why Nvidia Stock Jumped Wednesday

Motley Fool2021-07-22
After a short pullback following Nvidia's recent stock split, investors went right back to bidding up the tech titan's shares.

What happened

NVIDIA Corp climbed 4.3% on Wednesday, following its 4-for-1 stock split on Tuesday.

So what

Stock splitsdon't change the fundamental value of a business. A 4-for-1 split is in many ways like exchanging a $1 bill for four quarters. The total value is the same; it's just divided into more pieces.

Nevertheless, traders do tend to get excited about stock splits, and this can positively impact a stock's price leading up to the split. After the split occurs, however, traders often take the opportunity to book short-term profits. And many investors, who are now in possession of more shares, use it as a chance to sell part of their holdings and book some long-term profits.

These short-term price dynamics appeared to impact Nvidia's stock in recent weeks. Its share price rose 25% from when it announced its stock split on May 21 until July 19. And after the split took place on July 20, Nvidia's shares fell as much as 3.5% before ending the day down about 1%.

Now what

Now that the split has occurred, investors appear to be focusing on Nvidia's fundamental growth drivers once again. And in this regard, Nvidia's future appears bright. Rising demand for its chips in booming markets, such as data centers and gaming, are driving sharp increases in revenue and profits. With this likely to remain the case for the foreseeable future, Wednesday's gains could be just part of a far larger upward move for Nvidia's share price in the coming years.

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精彩评论

  • GoodLife25
    2021-07-23
    GoodLife25
    Reason for split as to affordable for more investor, time will tell & looking forwards for more profit soon [微笑] 
  • lalaland0
    2021-07-22
    lalaland0
    Hahauaha
  • Whyandwhynot
    2021-07-22
    Whyandwhynot
    Like and comment please 
  • 我会成为小富婆
    2021-07-22
    我会成为小富婆
    Like and comment please
  • JayH
    2021-07-22
    JayH
    Stock up 
  • NewbieLeo
    2021-07-22
    NewbieLeo
    There qremqny other stocks and tickers that jumped. And the entire stock market was in the green.
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