One of Wall Street's Cheapest Tech Stock-Split Stocks Is Ready to Take Center Stage This Week

For a majority of the last two years, no trend has excited the investing community quite like the rise of artificial intelligence (AI). But in 2024, the euphoria surrounding stock splits has, arguably, played an equally critical role in lifting stock valuations.

A stock split is a mechanism publicly traded companies have available that allows them to adjust their share price and outstanding share count by the same factor. What's worth noting about stock splits is that they're entirely cosmetic. Adjusting a company's share price and share count has no impact on market cap or operating performance.

Though there are two types of stock splits -- forward and reverse -- investors overwhelmingly favor companies conducting forward splits. This is the type of split designed to reduce a company's share price to make it more nominally affordable for everyday investors, and it's almost always undertaken by businesses that are handily out-innovating and out-executing their peers.

In 2024, more than a dozen prominent companies have announced or completed stock splits, and all but one have been of the forward-split variety.

This week, one of the cheapest tech stock-split stocks of 2024 will have its moment in the sun as it readies for its first split in nearly a quarter of a century.

AI stock-split stocks have hogged the spotlight for much of the year

With high-flying stocks often drawing the attention of Wall Street and investors, it should come as little surprise that much of the focus this year has been on artificial intelligence-driven companies completing stock splits. Although Super Micro Computer and Lam Research effected respective 10-for-1 forward splits of their own last week, I'm primarily talking about the buzz AI leaders Nvidia (NASDAQ: NVDA) and Broadcom (NASDAQ: AVGO) have created.

Nvidia was the first top-tier AI stock to complete a forward split in 2024, with the company's historic 10-for-1 split taking effect after the close of trading on June 7.

The need for Nvidia to split -- its shares topped $1,200 the day its split went into effect -- is a direct reflection of its dominance in high-compute enterprise data centers. Demand is off the charts for the company's H100 graphics processing unit (GPU) and next-generation Blackwell GPU platform, which have sent sales, profits, and gross margin soaring. Nvidia's exceptional pricing power has allowed it to charge between a 100% and 300% premium to competing AI-GPUs.

Meanwhile, Broadcom followed in Nvidia's footsteps five weeks later by completing its first-ever stock split, also 10-for-1, following the close of trading on July 12.