While it's possible that NVIDIA's announcement of a stock split helped catalyze a rise in the company's stock price, such behavior isn't rational as there's no increase in the value of an investor's stake.
The total value of the four new shares, however, will be the same as what one share was worth at the moment of the split. In this case, NVIDIA investors will have four shares for every one share they previously owned. All that happens when a stock splits is that every share a shareholder owns is adjusted relative to the designated share-split ratio. In addition, it doesn't increase the long-term prospects for the stock. Investors should note that a stock split doesn't actually make an investor's stake in a company more valuable. The stock is up more than 30% since the tech company announced its stock split in May.
Shares of NVIDIA have notably soared recently.
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