NVDA: Nvidia Big 10-for-1 Stock Split Completed. What Does It Mean for Traders?

If you woke up to a 90% drawdown in your Nvidia share price, don’t panic — look at your share count, not the price.

• Nvidia stock NVDA just wiped out 90% of its share price. But don’t panic! It’s all part of a planned stock split, which saw 1 share turn into 10. The chip giant’s 10-for-1 stock split took effect after Friday’s closing bell. This means that if you had 1 share on Friday worth $1,208.88 now you have 10 shares, each worth $120.89. Nvidia finished its first post-split session higher by 0.8%.
• A stock split doesn’t do anything to the market cap, which is what you should be looking at when trying to evaluate If a company’s valuation is overblown. To this end, Nvidia’s market cap remained untouched, floating above $3 trillion. What happened is Nvidia flooded the market with a boatload of new shares issued so that each share pre-split could be joined by nine more shares, thus diluting the share price.
• Such an operation is usually performed when a company’s valuation increases significantly and it balloons the share price, making it less appealing to individual traders and investors. With Nvidia, the AI mainstay announced its decision to split the stock when it reported blockbuster earnings results at the end of May. On the year, shares boast a gigantic rise of more than 150%.