What causes stocks to rise in a short time? Something big has to happen to provide a catalyst for stocks to take off.
Two of the market’s most followed stocks could soon have such catalysts. Major developments ahead Apple (NASDAQ: AAPL) And Nvidia (NASDAQ: NVDA) are just a few days away. Should you buy both stocks now?
Major events for these two tech giants
Apple’s big news should be announced on June 10. Then the company’s annual Worldwide Developers Conference (WWDC) begins. While the event runs through June 14, Apple will hold its keynote presentation on the first day.
Speculation has reached a fever pitch over what Apple might announce at this year’s WWDC. Many industry observers expect the company to introduce significant new artificial intelligence (AI) capabilities. Apple CEO Tim Cook hinted in the May quarterly conference call: “We can’t wait to reveal what we have in store.” He then commented on Apple’s investments and capabilities in generative AI, fueling expectations that the company will talk about new generative AI tools at WWDC.
Apple’s upcoming big news is shrouded in mystery. No one knows for sure what the company will announce at its event next week (although there is no shortage of predictions). For Nvidia, however, it’s a different story. Investors know exactly what will happen.
Nvidia will conduct a 10-for-1 stock split after the market closes on Friday, June 7. All record holders of its common shares at market close on Thursday, June 6, will receive an additional nine shares. Nvidia will begin trading at a lower split-adjusted share price on the market open on Monday, June 10. This may be the most highly anticipated stock split of the year.
Want to buy Apple and Nvidia shares as quickly as possible?
Should you buy Apple and Nvidia ASAP to get into the stocks before their big moves in the coming days? There are some clear arguments why the answer might be yes.
Apple could wow investors with its new AI capabilities and continue the stock’s current recovery. Some think the company could even trigger a multi-year super cycle of iPhone upgrades.
Nvidia’s stock split could attract enough retail investors who haven’t bought the stock in the past due to its high share price, and create a new wave for the high-flying stock. The stock split could also pave the way for the addition of Nvidia to the Dow Jones Industrial Averagea move that would encourage mutual funds and exchange-traded funds (ETFs) that track the index to buy the shares.
However, there is no guarantee that the big news from Apple and Nvidia will provide strong catalysts. Apple’s AI announcements could be disappointing. There are already rumors going around that the company will not introduce any new hardware.
As for Nvidia, many online brokers already support buying and selling fractional shares, which reduces the impact of a stock split. I don’t think investors should buy Apple and Nvidia just because of their big developments coming up.
The long-term scenario for these stocks
Granted, it’s possible that Apple’s WWDC announcements and Nvidia’s stock split could cause temporary spikes for both stocks. However, the best approach for investors is to focus on the long-term prospects for these companies. And those prospects seem to be good in both cases.
Regardless of what Apple unveils next week, the company could be in a prime position to take the lead in the edge AI market. Until now, the focus on AI has mainly focused on cloud applications. Edge AI involves running AI apps on devices where data is created and viewed.
More than 2.2 billion Apple devices, including iPhones and iPads, are used worldwide. With the right AI strategy, the company could be a big winner in the edge AI market.
Nvidia remains the 800-pound gorilla in the AI ​​chip market. I think the company’s pace of innovation can keep it at the top for years to come. If AI lives up to its potential (and I suspect it will), Nvidia should remain a great stock to own in the long run.
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Keith Speights has positions at Apple. The Motley Fool has positions in and recommends Apple and Nvidia. The Motley Fool has a disclosure policy.
Major developments for Apple and Nvidia are just days away. Should you buy both stocks now? was originally published by The Motley Fool
