If you wanted to buy Nvidia you now have the option at a lower price. The tech giant executed a 10-for-1 stock split after the market closed on June 7, 2024. Nvidia’s share price is the lowest in years.
After Nvidia, which AI leaders could get a monstrous stock split? Here are two top candidates and one final choice.
1. Broadcom
In a sentence, Broadcom (NASDAQ:AVGO) never split its shares. Avago acquired the “old” Broadcom in 2016 and kept its name. The “old” Broadcom had done three stock splits before it was acquired. However, Avago never split its shares, and neither did the ‘new’ Broadcom.
Broadcom’s share price is currently hovering around $1,440. That’s well above Nvidia’s share price when it split its shares. While the company’s management team hasn’t hinted at a stock split yet, the timing could be right for one — perhaps a 10-for-1 split along the lines of what Nvidia did.
Broadcom’s networking products are enjoying strong demand in AI data centers. However, the company is not resting on its laurels. It recently announced a new portfolio of Ethernet adapters specifically designed for AI infrastructure. Broadcom believes its latest product launch will “revolutionize the AI networking landscape.”
2. ASML Holding
ASML Holding (NASDAQ: ASML) has conducted five stock splits in its history. This number includes two reverse stock splits, one in September 2007 and one in November 2012.
There are good indications that another conventional stock split is on the way. ASML’s share price surpasses $1,040 and has remained above $800 for most of 2024 so far. However, the company has given no indication that a stock split is in the works.
ASML is the only manufacturer of extreme ultraviolet (EUV) lithography machines used to make the most advanced chips. How important is this benefit? Goldman Sachs believes chips made using EUV will “enable the next wave of AI.”
3. Lam research
Lam Research (NASDAQ:LRCX) has had two stock splits. However, the most recent, a 3-for-1 split, took place back in March 2000.
Unlike Broadcom and ASML, there is certainly a share split at Lam. Last month, the company announced a 10-for-1 stock split, scheduled for after the market close on October 2, 2024. This split makes sense considering Lam’s shares are trading above $1,000.
Lam is a leading supplier of wafer manufacturing equipment used in semiconductor manufacturing. The company’s AI edge is in storage. AI apps require fast, high-density storage. Lam’s technology enables the production of enterprise solid-state drives that are 50 times faster and up to five times more energy efficient than hard drives, which currently store more than 80% of enterprise data.
Are these potential stock split candidates buying?
I wouldn’t buy any of these stocks just because of their planned (for Lam Research) and possible (for Broadcom and ASML) future stock splits. Stock splits have no effect on the underlying businesses or growth prospects of companies.
That said, I think all three of these stocks could deliver fantastic profits over the long term as AI continues to drive demand for high-performance chips and the equipment needed to make those chips. Broadcom, ASML and Lam Research must remain at the forefront of the AI chip market.
It’s fair to say that these three stocks are all trading at premium valuations. They may be more volatile than most stocks. However, Broadcom, ASML and Lam should be good choices for aggressive growth investors.
Should you invest €1,000 in ASML now?
Please consider the following before purchasing shares in ASML:
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Keith Speights has no position in any of the stocks mentioned. The Motley Fool holds positions in and recommends ASML, Goldman Sachs Group, Lam Research and Nvidia. The Motley Fool recommends Broadcom. The Motley Fool has a disclosure policy.
These could be the next monster AI stock splits after Nvidia was originally published by The Motley Fool
