Splitsville
What's next for Nvidia
Good morning, cyber visionaries. This is your Stock Market Rundown for May 28th, 2024. Thanks for joining me once again. Let’s dig in:
TODAY’S TOP STORY: NVIDIA’S MICROCHIP MASTERY
As the dominant designer of cutting-edge chips used for artificial intelligence applications, Nvidia is the bellwether of the AI boom.
Relentless demand for its graphics processing units (GPUs) has sent Nvidia’s valuation skyrocketing by more than 90% this year—minting millionaires among its employee base. (And yes, they’re hiring.)
The company just crushed another quarter, lifting the stock price to record highs of over $1,000 per share. Management announced a dividend increase and ten-for-one stock split.
So what exactly is a “stock split”? That’s when a public company increases the number of its outstanding shares by issuing more shares to current shareholders. When a stock you own gets split, there’s no change in the economic value of the shares you own.
But they’re a bullish signal: stocks tend to outperform the market in the 12 months after they split. So your stock splitting is kind of like getting a fortune cookie that says “financial prosperity is coming your way.”
Will Nvidia enjoy some of that old stock-split magic? Well, its current market value is $2.6 trillion. To put that in perspective, it’s more than the market value of all German public companies combined.
Nvidia’s lofty valuation may stick around if it keeps up its string of earnings beats… but if it stumbles, it could crash like a self-driving car with a software bug.
SO WHAT ELSE IS GOING ON?
A startup charter airline called Bark Air is catering to pet owners by offering cross-country flights with a “dog-first” experience. You’ll need a lot of kibble to get onboard: tickets start at $6,000.
Layoffs watch: Nemo and Buzz Lightyear are going to have to apply for unemployment. Animation studio Pixar is laying off 14% of its workforce as Disney cuts back on content spending.
Mondelez, the maker of Oreos and Toblerone, has been fined millions by European regulators for abusing its market dominance. Who knew there was a Godfather of the cookie aisle ruling with an iron fist?
Self-driving cars are causing chaos in the streets. A regulatory probe revealed Google’s Waymo self-driving vehicles have caused a bunch of collisions. They’re probably still safer than great-grandad trying to change lanes on the interstate.
That’s it for today, my friends; catch you back here at the usual time tomorrow morning. Yours in capitalism, The Axe
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