Nvidia's highly expensive shares are about to become significantly more affordable.

Nvidia processor and superchips on display on stage at the COMPUTEX forum in Taipei, Taiwan May 29, 2023. Nvidia's sales continue to rise thanks to demand for its AI chips. 

Ann Wang/Reuters

Nvidia announced a 10-for-1 stock split on Wednesday, making it easier for individual investors to buy shares in the rapidly growing semiconductor company.

Five years ago, Nvidia stock could be bought for under $50 a share. Since then, the stock price has skyrocketed by over 2,500%. As of Wednesday's close, a single share was valued at $949.50.

In its quarterly earnings report, Nvidia stated that each common share will be split into 10 smaller shares, significantly reducing the price per share and making investment in the company more accessible.

The company also reported another strong quarter financially, with a 262% increase in revenue and a 462% increase in profits year-over-year.

Nvidia's post-split shares will start trading on June 10, amidst a period of significant investor enthusiasm about the company's pivotal role in artificial intelligence.

Following the report, Nvidia shares rose by as much as 4% in after-hours trading.

Nvidia is essential in the growing AI sector, producing processors critical for artificial intelligence systems, including generative AI, which creates text, images, and other media. The company’s soaring stock price over the past year has made Nvidia a key player in the broader market, reflecting the AI boom.

Exceeding Wall Street’s expectations for sales growth was not surprising, given that tech giants like Microsoft, Meta, and Alphabet are heavily investing in AI infrastructure, positioning Nvidia to benefit greatly.

However, some investors had concerns about how long Nvidia could sustain its rally, considering growing competition from in-house AI chips by Amazon and Alphabet, and US restrictions on exporting advanced AI chips to China.

“There was no secret around Wall Street that Nvidia’s earnings would come in hot once again,” said Thomas Monteiro, senior analyst at Investing.com. “While the company didn’t replicate the total blowout from previous quarters in any specific area, today’s numbers remain incredibly strong, leaving no doubt that the company’s leadership in the AI revolution remains unchallenged for now.”

Nvidia expects its revenue for the current quarter to grow approximately 107% year-over-year, indicating a slight slowdown from the rapid sales growth seen in recent quarters, as it reaches the one-year mark since the AI boom began.

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