‘Tis the Season: Stocks Splits

Nvidia Stock Split: A Recap

Nvidia (NVDA) announced its stock split on May 22, 2024, and since then, it’s traded from a (split-adjusted price) of around $95 to a new, all-time high at $129.74 (as of this writing). It’s still going and is currently up another +2% four days after the split, making it significantly more affordable for the ever-intriguing masses.

The day after NVDA announced the split, I wrote to all of you and spoke to my friend Charles Payne on FoxBusiness about how I could not hide my glee about this news and how I’d use it to trade NVDA up into $1200. Post-split, the new target became $130, which has now essentially been met.

A Season of Splits

The ride in NVDA has been glorious, but it hasn’t been the only stock split move this year. Walmart (WMT) and Chipotle (CMG) have both experienced split trades, and now we have yet another one on the docker: Broadcom (AVGO).

With the chatter surrounding splits, market watchers (including me) were very hopeful for a split announcement in Broadcom stock. After all, the stock has been on a tear, and while it doesn’t get as much attention as Nvidia, it is always on my radar as it’s one of my long-term investments and a top semiconductor stock to trade.

Broadcom: An Upcoming 10:1 Split

Yesterday, we got our wish as AVGO announced a 10:1 split during their earnings report, in addition to strong demand due to AI. This stock will start trading at its split-adjusted price on July 15th.

AVGO had an expected market maker move of $100 over the earnings report, but it ended up gapping up $214.49, twice the expected move. A 2x move post-earnings generally results in a post-earnings momentum move for around 5-7 days, which is a major upside catalyst on top of split news.

Check out a screenshot of the earnings/split move below:

So, will I be trading the Broadcom move? Will you? I think it’s a great setup, though admittedly, it’s extended. That’s why it’s aggressive, meant for the non-risk-averse trader.

Broadcom can be challenging to trade because of the width of the spreads and lack of volume in the options market. In great news, this likely won’t be a problem post-split! It has great key psychological values as targets, with the next two at $1700 and then $1800. With an expected move of $142 into the split, a trade into $1800 is not out of the question!

 

 

 

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