2 artificial intelligence (AI) companies that could follow Nvidia’s lead and split their shares

Stock distribution generating a lot of buzz in the investing world, especially among amateurs. You probably already know that a split doesn’t affect the underlying value of the company: if you own a stock worth $100 and the company does a 10-for-1 split, you would have 10 shares worth $10 each for the same value of $100.

However, there are some benefits to the lower price per share. For example, it is easier for small investors to accumulate a position. Let’s say you put $300 into an account per month; it is easier to accumulate a position in a stock selling for $100 rather than $2,000. The ads also draw attention to the company, which could be helpful.

Nvidia is the latest major tech company to announce a split (the second in the last three years). The stock split 10-to-1 last week after an incredible run in previous years, as shown below. But Nvidia isn’t the only company whose stock price is rising. The boom in artificial intelligence (AI) has propelled several other stocks to all-time highs.

Could one of them below be the next to split their stock?

Super microcomputer

Let’s look first Super microcomputer (NASDAQ:SMCI), which trades at over $750 per share. That’s well below its 52-week high of $1,229, but well above the 52-week low of $213. Supermicro (as it’s called) is a staple in the AI ​​sector, as its server, storage, and networking hardware are essential to data centers, edge computing, and more.

Intense customer demand, primarily driven by AI, has recently caused revenue and operating profit to soar, as shown below.

SMCI Earnings Chart (TTM)

The company’s latest quarter saw sales increase 200% year-over-year to $3.9 billion, and Supermicro expects its intense growth to continue next quarter with a forecast of 5.1 at $5.5 billion. The upside to this sales growth is that Supermicro is achieving it profitably, as shown by the increase in operating profit in the chart above. Data center growth is a tailwind that is expected to last for years (see This item for more details).

If the stock price remains high, the company could decide to split its shares, potentially soon.

ServiceNow

Businesses are turning to automation like never before. Automating tasks is essential for efficiency, which is paramount in the hyper-competitive business world. With the Now platform provided by ServiceNow (NYSE: NOW)Customers benefit from virtual customer service agents, process automation, and AI-powered detection, routing, and problem-solving solutions.

ServiceNow has a growing customer base of more than 8,100 customers, including 85% of the Fortune 500. This includes nearly 2,000 large customers who spend an average of $4.6 million each with ServiceNow annually. The company also boasts a 98% renewal rate. Like Supermicro, ServiceNow’s sales and operating profits are soaring, as shown below.

Earnings Chart NOW (TTM)

The $9.5 billion in trailing 12 month sales above includes $2.6 billion in the first quarter, an increase of 24% from a year ago….

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