Nvidia and Broadcom: Here's How These Top AI Stocks Are Doing 1 Year After Their Stock Splits

Leading AI players Nvidia and Broadcom have posted strong double-digit gains, with Nvidia up over 40% and Broadcom over 65%, since their 10-for-1 stock splits in June and July 2024, respectively. While the splits made shares more accessible, their robust post-split performance is primarily driven by surging demand for AI-related products, including Nvidia's GPUs (e.g., Blackwell architecture generating $11B in Q1 revenue) and Broadcom's networking and XPU offerings (77% AI revenue surge to $4.1B). This sustained demand, coupled with strong execution and easing tariff concerns, underscores their dominant market position and long-term growth prospects in the expanding AI sector.

Analysis

Both Nvidia (NVDA) and Broadcom (AVGO) have demonstrated significant fundamental strength in the year following their respective 10-for-1 stock splits, dispelling the notion that the operations themselves were the primary performance drivers. Nvidia's stock has appreciated over 40% post-split, underpinned by sustained, high demand for its GPUs and the successful launch of its Blackwell architecture, which generated $11 billion in revenue in its inaugural quarter while maintaining gross margins above 70%. This robust execution, coupled with easing concerns over import tariffs, propelled the company to a $4 trillion market capitalization. Similarly, Broadcom's stock has climbed over 65%, driven by its critical role in AI infrastructure. The company's AI-related revenue surged 77% to $4.1 billion in its most recent quarter, fueled by demand from cloud service providers for its networking products and accelerated processing units (XPUs). Management at Broadcom anticipates this momentum will persist. Both companies have rebounded from earlier market-wide concerns, indicating strong investor confidence in their long-term positioning within the secular growth of the artificial intelligence market.

Key Decisions for Investors

• Investors should look beyond the mechanics of the stock splits and focus on the underlying fundamental drivers, namely the unabated demand for AI hardware and networking infrastructure which supports the continued bullish case for both Nvidia and Broadcom.
• Monitor key performance indicators such as Nvidia's gross margins and Blackwell revenue uptake, and Broadcom's AI segment growth, as these metrics are the primary justification for their current valuations and future performance.
• Despite recent optimism, remain vigilant of geopolitical risks, as the re-emergence of tariff concerns could introduce volatility, even if underlying business fundamentals remain strong.
• Given that both companies are described as reasonably priced relative to their earnings power and long-term prospects, the current price levels may represent a sound holding or accumulation point for portfolios with a long-term, high-growth mandate in the technology sector.