Stock Splits: A 2024 Roundup

Walmart: Kicking off the Year of Stock Splits

2024 kicked off with a bang in the investment world, as several titans of industry opted for stock splits. Leading the charge was the retail giant, Walmart (NYSE: WMT), which initiated a 3-for-1 stock split this January. This was the company’s first split since 1999. CEO Doug McMillon explained that this move was aimed at making Walmart shares more accessible for its associates, thereby democratizing ownership in the company. Since the split was conducted after the market closed on February 22, Walmart’s stock has seen an impressive uptick, soaring nearly 30%.

Chipotle’s Massive 50-for-1 Stock Split

In March, Chipotle Mexican Grill (NYSE: CMG) announced a colossal 50-for-1 stock split. Fast forward a few months, and the split was executed after the market close on June 25, following shareholder approval. This move was monumental, aimed at making the stock more attainable for a broader base of investors. Chipotle’s shares have mirrored Walmart’s success, climbing close to 36%, signaling robust investor confidence.

Amphenol: Narrowly Beating Chipotle to the Punch

Amphenol (NYSE: APH) also entered the fray with a 2-for-1 stock split. Despite announcing it in May, the electronic components maker managed to conduct its split before Chipotle, just after the market closed on June 11. The quick action paid off; Amphenol’s stock joined the ranks of high performers, also climbing around 36% year to date.

Upcoming Stock Splits: The Next Big Movers

A slew of other companies have lined up their stock splits for the coming months. Williams-Sonoma (NYSE: WSM) is set for a 2-for-1 split on July 8, followed closely by chipmaker Broadcom (NASDAQ: AVGO) with an ambitious 10-for-1 split on July 12. Sony (NYSE: SONY) plans to implement a 5-for-1 stock split on September 30, while Lam Research (NASDAQ: LRCX) will conduct a 10-for-1 stock split on October 2. These announcements have already borne fruit. Broadcom’s stock has skyrocketed over 50% year to date, while Williams-Sonoma enjoys a nearly 40% gain. Lam Research isn’t far behind with an approximate 38% increase. The outlier, however, is Sony, which has dipped nearly 10%.

The Crowning Jewel: Nvidia’s Spectacular Performance

But the true star of the stock-split stage belongs to Nvidia (NASDAQ: NVDA). The GPU behemoth announced a 10-for-1 stock split during its first-quarter update on May 22 and followed through after the market close on June 7. The results have been nothing short of sensational. Nvidia’s stock has catapulted over 150% year to date, dwarfing all other stock-split contenders this year. This stunning rally follows an even more impressive 239% gain in 2023, illustrating that the demand for GPUs, bolstered by powerful generative AI trends, remains a potent growth catalyst.

Beyond Stock Splits: Tesla’s Puzzling Performance

Not to be overshadowed by the stock-split frenzy, Tesla (NASDAQ: TSLA) has had its own rollercoaster ride. Tesla’s recent announcement that second-quarter vehicle deliveries exceeded Wall Street’s expectations by hitting 443,956 units provided a much-needed boost to the stock. This surprise resulted in a 21% surge over five days. Despite the uptick, Tesla has reported a 4.8% decrease from the prior-year period and has faced consecutive quarters of declining deliveries.

Musk to the Rescue: Tesla’s Diversification Strategy

In typical Elon Musk fashion, the company is pivoting towards new horizons, notably within AI and robotics. Tesla’s development of Dojo, a supercomputer aimed at enhancing its machine-learning models for full self-driving (FSD), offers an intriguing glimpse into the future. Additionally, Musk teases the unveiling of a robotaxi and a next-gen vehicle platform on August 8. Should these ventures succeed, they could open lucrative non-automotive revenue streams, putting Tesla in a strong position to delve into sectors like warehouse automation or even humanoid robotics over the next five years.

Analyzing Investment Prospects: Choose Your Adventure

If you’re skittish about economic downturns, Walmart offers a recession-resistant investment. On the other hand, dividend seekers might find Williams-Sonoma attractive for its relatively high yield. For growth enthusiasts, Nvidia and Broadcom present compelling cases. Broadcom’s lower forward earnings multiple contrasts with Nvidia’s explosive growth; the latter still holds substantial promise thanks to the surging demand for GPUs driven by AI applications. As for Tesla, its future hangs in a delicate balance. The company’s high-margin EV business could suffer amid increasing competition and pricing pressures. However, Musk’s diversification into AI and robotics may potentially reframe Tesla’s narrative, providing new avenues for growth and sustainability. So, as an astute tech investor, what should you do? Investing in any of these stocks will depend heavily on your individual risk tolerance, financial goals, and perspectives on broader economic trends. One thing is certain: 2024 will be an exhilarating year for tech investments.

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