2 Top Stock-Split Stocks to Watch in September

Understanding Stock Splits

A stock split occurs when a company divides its existing shares into multiple new shares to boost the liquidity of the shares. This action does not change the company’s market capitalization; however, it makes shares more affordable for retail investors, which can lead to increased trading volume. Historically, stock splits have been seen positively by investors as they can signal a company's confidence in future growth.

Historical Context

Looking back at previous stock splits can provide insight into their potential impact on financial markets. For example, when Apple Inc. (AAPL) announced a 4-for-1 stock split in July 2020, the stock price surged by approximately 10% in the following weeks. Similarly, Tesla's (TSLA) 5-for-1 split in August 2020 resulted in a significant uptick in share price, reflecting investors' enthusiasm.

Potential Short-Term and Long-Term Impacts

Short-Term Effects

• Increased Trading Activity: Following the announcement of stock splits, trading volumes often increase as more investors can afford to buy shares. This could lead to short-term price volatility.
• Positive Market Sentiment: Stock splits can be perceived as a bullish signal, which may attract momentum traders looking to capitalize on the stock's upward trajectory.

Long-Term Effects

• Market Capitalization Stability: While splits do not affect market capitalization directly, companies that implement splits often have strong fundamentals, which can lead to sustained growth.
• Increased Accessibility: Lower share prices can make stocks more attractive to retail investors, potentially expanding the shareholder base and leading to a more stable price over time.

Stocks to Watch in September

1. NVIDIA Corporation (NVDA)

• NVIDIA has been a frontrunner in the semiconductor industry, especially with the rise of AI and gaming technologies. If NVIDIA were to consider a stock split, it would likely attract more investors due to its current high share price.

2. Amazon.com, Inc. (AMZN)

• Amazon's recent stock split in 2022 has already shown positive investor sentiment. A revisit of splitting its shares could further enhance its accessibility and increase its trading volume.

Affected Indices and Stocks

• Indices:
• S&P 500 (SPX)
• NASDAQ Composite (IXIC)
• Stocks:
• NVIDIA Corporation (NVDA)
• Amazon.com, Inc. (AMZN)

Conclusion

As we observe stock splits in September, it's essential to monitor these stocks and their impact on the broader indices. Historically, stock splits have had a positive effect on share prices and investor sentiment. Therefore, keeping an eye on NVIDIA and Amazon could lead to fruitful investment opportunities. As always, investors should conduct thorough research and consider market conditions before making investment decisions.

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*Note: Past performance is not indicative of future results. Always consult with a financial advisor before making investment choices.*