Next in Line for a Stock Split: This AI Equipment Maker

Published Date: 27/06/2024

After Nvidia and Broadcom's stock splits, this AI equipment maker could be next in line for a stock split, driven by soaring revenue and demand for its products.

Stock splits have taken the market by storm, with companies like Nvidia and Broadcom recently announcing 10-for-1 stock splits. This movement is a positive sign for the market and investors, making it easier for a wider range of investors to buy shares. Now, investors are wondering which other top-performing technology stocks may join the stock split party. My prediction is that Super Micro Computer, an equipment maker that has seen revenue soar thanks to AI demand, may be next to launch a split.

Super Micro shares have risen over 4,000% in the past five years, reaching more than $800 today. The company has never launched a stock split, but its situation today is much different from its situation several years ago. Super Micro's revenue has steadily grown over the years, but it only truly took off as the AI boom gathered momentum.

The AI market is expected to grow from $200 billion today to more than $1 trillion by the end of the decade, and Super Micro is well-positioned to benefit from this growth. The company's products share many common parts, allowing for rapid building and customization, and its liquid cooling technology is an important feature for AI data centers.

Super Micro's management may consider announcing a stock split to make its shares more accessible to investors with smaller budgets. If this happens, it would show management's confidence in the company's future and potential for share price growth.

Should you buy Super Micro now or wait? While a potential stock split is positive, it isn't a catalyst for share price moves and doesn't change anything fundamental. If you want to benefit from the Super Micro story, there's no reason to wait for a potential stock split to buy. Now is a great time to get in on this AI growth stock and hold on for the long term.

FAQs:

Q: What is a stock split?

A: A stock split is a corporate action where a company divides its existing shares into multiple shares, reducing the price of each share.

Q: Why do companies announce stock splits?

A: Companies announce stock splits to make their shares more accessible to investors with smaller budgets and to make it easier for employees and others to buy their shares.

Q: What is the AI market size expected to be by the end of the decade?

A: The AI market is expected to grow from $200 billion today to more than $1 trillion by the end of the decade.

Q: What is Super Micro Computer's product focus?

A: Super Micro Computer's product focus is on servers, workstations, full rack scale solutions, and other equipment needed in AI data centers.

Q: Should I wait for a potential stock split to buy Super Micro shares?

A: No, a potential stock split is not a catalyst for share price moves and doesn't change anything fundamental. If you want to benefit from the Super Micro story, there's no reason to wait for a potential stock split to buy.

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