Throughout the annals of investment history, various technologies have emerged as the darlings of Wall Street, captivating investors and driving the market to unprecedented highs. From the internet to cloud computing, these trends have enticed investors with the promise of lucrative returns.

However, in the rarest of occasions, two seismic trends collide, sending shockwaves through the stock market. In the year 2024, the realms of artificial intelligence (AI) revolution and stock-split frenzy have intersected, propelling major indexes to dizzying heights.

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Stock splits, a financial maneuver employed by publicly traded companies to adjust their share price and outstanding share count, have been all the rage in 2024. While such splits may appear purely cosmetic, they have no tangible impact on a company’s market capitalization or operational performance.

Of the two types of stock splits – forward and reverse, it is the forward splits that steal the limelight, indicating a company’s robust performance and innovative prowess. Unlike reverse splits that signal operational weakness, forward splits are a badge of honor for companies outperforming their peers.

As the year unfolded, a select group of prominent companies announced their stock splits, capturing the market’s attention. Among these high-profile events, the spotlight now turns to the most highly-anticipated AI stock split of the final quarter, slated for September 30.

The Reign of Nvidia and Broadcom in the AI Stock Split Arena

In recent months, Nvidia (NASDAQ: NVDA) and Broadcom (NASDAQ: AVGO) have emerged as the titans of artificial intelligence stocks, commanding headlines and investor interest.

Nvidia took the plunge on May 22, announcing its first stock split amidst a staggering $2 trillion surge in market cap in under 17 months. With a 10-for-1 forward split, Nvidia’s dominance in the AI-graphics processing unit (GPU) market has solidified, particularly with its flagship H100 GPU monopolizing enterprise AI-accelerated data centers.

The impending release of the Blackwell GPU architecture has further fueled investor excitement, promising enhanced energy efficiency and groundbreaking AI applications. Nvidia’s relentless pursuit of innovation is expected to cement its position as a leader in AI-GPU computing.

On the other hand, Broadcom, the AI networking solutions provider, announced its debut stock split in mid-June, boasting a 10-for-1 forward split effective from July 12.

With a diverse revenue stream, including wireless chips for next-gen smartphones, Broadcom’s growth trajectory is buoyed by its critical role in AI solutions and the 5G revolution, sustaining its competitive edge in the market.

While Nvidia and Broadcom shone in the second and third quarters, a fresh contender is poised to steal the spotlight in the AI stock split arena.

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Unveiling Super Micro Computer’s Inaugural AI Stock Split of the Fourth Quarter

As the clock ticks towards the end of after-hours trading on Sept. 30, Super Micro Computer (NASDAQ: SMCI) is set to execute its maiden stock split since going public over 17 years ago. With a 10-for-1 split, marking a significant reduction in nominal share price, Super Micro is poised to join the elite league of AI stock splitters.

Experiencing a staggering 779% surge in share value over the past two years, Super Micro’s ascent is powered by the burgeoning demand for AI infrastructure solutions. Its robust sales performance, doubling to $14.9 billion in fiscal 2024, reaffirms the company’s growth trajectory.

Anchored by Nvidia’s premier H100 GPUs in its AI-focused rack servers, Super Micro remains a key player in the AI hardware landscape, catering to businesses seeking a competitive edge in high-performance computing.

However, a shadow looms over Super Micro’s reliance on Nvidia’s GPUs, with supply bottlenecks impeding its ability to meet soaring demand from clients. The risks inherent in the volatile AI market, prone to bubbles and bursts, add a layer of complexity to Super Micro’s growth narrative.

With Super Micro Computer poised to take the stage as the latest AI stock split contender, the spotlight now turns to its ability to navigate the turbulent waters of the AI landscape and emerge as a titan in its own right.

The Unpredictable Future of Super Micro Computer: A Bubble Waiting to Burst?

The History of Super Micro Computer

Super Micro Computer, like many tech giants before it, finds itself walking on a tightrope between mammoth success and catastrophic failure. The mid-2010s saw growth forecasts soaring to dizzying heights, only to come crashing down as the promised boom in cloud computing failed to materialize. Now, as speculation looms over the company’s future, Super Micro is once again in the eye of the storm.

The Dark Clouds of Allegations

Noted short-seller Hindenburg Research’s accusations of “accounting manipulation” have cast a dark shadow over Super Micro Computer. The backdrop of a U.S. Justice Department investigation only adds to the ominous atmosphere surrounding the company. Despite vehement denials and assurances from company executives, the delayed annual report filing has set off alarm bells among jittery investors.

The Stock Split Dilemma

As Super Micro Computer’s highly anticipated stock split unfolds, investors find themselves at a crossroads. The retail investing community now faces a pivotal decision, where the company’s fate hangs in the balance.

Investing in Super Micro Computer: A Gamble or a Goldmine?

Before diving headfirst into Super Micro Computer stock, consider this cautionary tale. The Motley Fool Stock Advisor team, renowned for spotting market gems, has pointedly left Super Micro Computer off its list of top picks. Instead, they tout 10 other stocks predicted to yield substantial returns in the near future.

Reflecting on the past can sometimes offer clarity for the future. When Nvidia made the elite list back in 2005, early investors witnessed a staggering return of $743,952 on a $1,000 investment. A tale of caution and excitement at the same time.

The Stock Advisor service unveils a roadmap to financial triumph, promising insights on portfolio construction, regular analyst updates, and two fresh stock recommendations monthly. With returns that have eclipsed the S&P 500 fourfold since 2002, it’s a treasure trove for investors seeking robust growth.

Could Super Micro Computer be the next success story or a cautionary tale in the making? Only time will reveal the path chosen by investors as they navigate the tumultuous waters of the tech market.

*Stock Advisor returns as of September 23, 2024

Sean Williams has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nvidia. The Motley Fool recommends Broadcom. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.