Stock-Split Watch: Is Nvidia Next?

Nvidia's stock has slowed in 2025, down 3% YTD, leading to speculation about another stock split, though one is unlikely in the near term as the share price hasn't changed enough to warrant it. The company's fundamentals remain strong, with fiscal year 2025 revenue up 114% to $130.5 billion and net income up 145% to $72.9 billion, driven by demand for GPUs in data centers and gaming; however, potential headwinds include tariffs and trade tensions with China, which could impact earnings.

Analysis

Nvidia (NVDA) demonstrated robust financial health in its fiscal year 2025, with revenue growing 114% year-over-year to $130.5 billion and net income increasing 145% to $72.9 billion, primarily fueled by strong demand in its data center segment, which accounts for 88% of revenue and benefits from the AI boom. The company achieved an impressive 75% gross margin and recorded its eighth consecutive quarter of revenue expansion. Despite a 3% year-to-date share price decline in 2025 and the low probability of another stock split following the June 2024 10-for-1 adjustment (which brought the price from $1,208.88 to $120.88, after which its value rose 10.2%), Nvidia's underlying business fundamentals remain strong. The company faces potential short-term headwinds from U.S.-China trade tensions and tariffs—evidenced by an expected $5.5 billion special charge this quarter for H20 processor exports and manufacturing in tariff-impacted regions—though these tariff rates have reportedly been lowered for now. In a strategic move to address these challenges, Nvidia plans a $500 billion investment in U.S.-based AI infrastructure over four years, aiming to bolster domestic production. Given its leadership and the projected expansion of the global GPU market from $70 billion in 2024 to $237.5 billion by 2030, Nvidia appears well-positioned for continued growth, with its next earnings report on May 28 being a key checkpoint.

Key Decisions for Investors

• Investors should closely monitor Nvidia's upcoming quarterly earnings report on May 28 for continued financial strength, updates on the $5.5 billion special charge, and management's outlook on navigating trade-related challenges, especially given its history of surpassing analyst expectations.
• Evaluate current valuations considering the recent 3% year-to-date share price moderation against the company's strong FY2025 financial results, sustained AI-driven demand, and significant projected GPU market growth, while remaining vigilant about the potential impact of tariffs and U.S.-China trade dynamics.
• Consider the strategic implications of Nvidia's planned $500 billion investment in U.S. AI infrastructure as a significant long-term de-risking measure and a catalyst for reinforcing its market leadership, potentially offsetting short-term geopolitical headwinds.