Stock splits don't change the value of a company, but they often signal management's confidence in future performance. This can lead to wealth-building gains for shareholders. If you have $1,000 or more to invest that isn't needed for daily expenses or debt repayment, you're in the right spot. Here, we highlight two top-tier companies that recently split their stock and are poised to deliver significant returns.
Despite easing inflation, the recent rise in essential costs has consumers hunting for bargains. Walmart, with its competitive pricing, has emerged as a crucial destination for these shoppers. The retailer's extensive range of low-cost groceries and household items is buoying sales, even as discretionary spending wanes. Unlike rivals such as Target, Walmart's focus on essentials has allowed it to outperform.
Additionally, Walmart's online sales are accelerating, with a 21% increase in e-commerce revenue during the latest quarter, driven by the demand for curbside pickup and delivery services. The surge in third-party sellers on Walmart's online platforms has boosted its sales further and expanded its lucrative advertising business by 26%. Investments in automation and AI have also enhanced profits; Walmart's operating income rose by over 8% to $8 billion on a 5% revenue increase to $169 billion. In February, the company rewarded shareholders with a 3-for-1 stock split. Thanks to its value-driven strategy, Walmart is expected to continue delivering strong returns.
While Walmart helps consumers save money, Nvidia fuels groundbreaking innovations. Nvidia's semiconductor designs are pivotal in the AI revolution. Tech giants like Microsoft and Alphabet are heavily investing in AI infrastructure, and Nvidia's chips lead the market. The company's revenue soared by 122% year-over-year to $30 billion in the most recent quarter, with net profits climbing 168% to $16.6 billion.
Nvidia's growth potential is enormous, as CEO Jensen Huang estimates that $1 trillion in data center equipment will need to be upgraded for the accelerating demand for AI. Nvidia's dominant position in AI chip design means it will capitalize more than any other company. Demonstrating its robust performance, Nvidia executed a 10-for-1 stock split in June, impressing investors. Wall Street analysts remain optimistic; Rosenblatt Securities analyst Hans Mosesmann predicts the stock could reach $200 per share, offering potential gains of over 85% for current investors. Nvidia's board also signaled confidence by increasing its share repurchase program by $50 billion on Aug. 26.
Investing $1,000 in high-quality companies like Walmart and Nvidia, which have recently undergone stock splits, can potentially bring attractive returns. These companies not only show operational excellence but also strategic foresight, underscoring their strong future prospects.
