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Analyzing NVIDIA's Dow Potential After Stock Split

Jun 11, 2024

Recent discussions have surrounded the likelihood of NVIDIA, a key player in artificial intelligence, joining the Dow Jones Industrial Average post its 10-to-1 stock split, a move strategized to appeal to retail investors.

An increase in outstanding shares during a stock split does not impact the market value of a company. Experts speculate that NVIDIA, presently the index's least weighted company compared to Intel Corporation (NASDAQ: INTC), might undergo a reshuffling to align with Amazon.com Inc (NASDAQ: AMZN) and Apple Inc (NASDAQ: AAPL) within the Dow.

Despite experiencing a substantial 27% surge since the announcement of the split and positive predictions, Nvidia witnessed a slight 0.2% decline in shares on Monday. Nvidia has recently surpassed Apple to secure the position of the world's second-largest firm by market value, even surpassing Microsoft Corporation (NASDAQ: MSFT).

Analysts anticipate a slowdown in investor purchasing post-split, likening the phenomenon to a 'hangover effect.' They highlight that institutional investors possess greater trading capital, enticing individual investors with smaller lots and heightened trading volumes.

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