On June 10th Eastern Time, Nvidia closed at $121.79 per share, an increase of 0.75%, with a total market value of $3 trillion. On June 7th, Nvidia's price was $1208.88 per share. This indicates that Nvidia's "high delivery" has been completed.
The so-called "high bonus conversion" generally refers to a large proportion of bonus shares or a large proportion of capital reserves converted into share capital, such as 6 shares for every 10 shares, 8 shares for every 10 shares, or 5 shares for every 10 shares. The essence of "high dividend conversion" is the internal structural adjustment of shareholder equity, which has no impact on the return on equity and has no substantial impact on the company's profitability. After the "high dividend" policy, although the total number of shares in the company has increased, the shareholder's equity of the company will not increase as a result. Moreover, with the net profit remaining unchanged, due to the expansion of share capital, the conversion of capital reserve into share capital and the issuance of bonus shares will dilute earnings per share.
Over the past year, driven by strong profits and future expectations, Nvidia's stock price has exceeded 200%, making it the second largest company in the world by market value. As of now, Microsoft, ranked ahead of Nvidia, has a total market value of $3.18 trillion; Apple, ranked behind Nvidia, has a total market value of $2.96 trillion.
Previously, technology giants such as Google, Amazon, Tesla, and Apple have all carried out ex rights, and the probability of a significant increase after ex rights is very high.
Generally speaking, when a company conducts a stock split, its basic value does not change, but the news of "high dividend payout" usually has a positive effect. This is true for A-shares, and it is also true for US stocks.
Analysts believe that for investors, splitting can attract more buyers, increase liquidity, and lower prices can also psychologically make investors feel cheap, even though the basic value of the company has not changed. Nvidia also stated that a stock split will make it easier for employees and investors to purchase stocks.
Since Nvidia announced a trading ratio of 10 shares to 1 share, its stock price has risen by over 27%.
Nvidia's last stock split was in 2021. In May of that year, Nvidia announced plans for a 1:4 stock split. At that time, Nvidia's stock price was around $600, and before the split took effect, Nvidia's stock price rose as high as $835.
Can Nvidia continue its strong upward trend after this "high delivery"?
Huaxin Securities believes that behind the accelerated iteration of AI chips is the strong growth momentum of the AI server market in 2024. It is expected that most ODM manufacturers will achieve double-digit growth in AI server shipments and market share, especially for models equipped with high-end AI chips such as NVIDIA H-series and AMD M-series, which are expected to double in shipments.
Recently, Dan Bin, the chairman of a well-known private equity firm, Dongfang Harbor, revealed that due to a significant increase in stock prices, Nvidia's holdings are now close to half and not a single share has moved. At the same time, Danbin also stated that if there is money in the future, Nvidia will continue to buy, and it is highly likely that Nvidia will surpass Microsoft to become the world's largest company in the future.