NVIDIA Stock Split at $100 Per Share! Should Retail Investors Get on Board Now?

   After the technology giant NVIDIA announced a 10-to-1 stock split, its stock price adjusted from $1,200 to around $120, a move that quickly ignited the enthusiasm of retail investors. However, the recent stock price volatility has intensified, and the market has divided on NVIDIA's long-term value.

For retail investors, is now a good time to enter the market? A comprehensive analysis is required from three dimensions: technical, fundamental, and market sentiment.

1. Market reaction and technical signals after the stock split

After NVIDIA's stock split plan was implemented in June 2024, the stock price fluctuated violently in the short term. Historical data shows that large stocks lose an average of 2.66% within six months after the stock split, and only 37.5% of the cases have positive returns.

However, as the absolute leader in the field of AI, NVIDIA's performance may exceed historical rules. As of June 2, 2025, Nvidia's stock price was $137.38, up 14.5% from the post-split low of $120, but down 1.3% from the high of $139.19 on May 29, 2025.

Technical analysis shows that Nvidia's stock price recently formed a "death cross" (the 50-day moving average fell below the 200-day moving average), a bearish signal that indicates weakening short-term momentum.

However, the RSI indicator (Relative Strength Index) fluctuates in the 30-70 range and has not yet entered the overbought or oversold area, indicating that the market's long and short forces are temporarily balanced. For short-term traders, the support level near $130 (May 28, 2025 low) and the resistance level of $140 (May 29 high) are key observation points.

2. Fundamentals: Growth engine under the AI ​​revolution

Nvidia's core competitiveness lies in its monopoly in the AI ​​chip market. In the fourth quarter of fiscal year 2025, the company's revenue reached US$39.3 billion, a year-on-year increase of 78%, and the data center business revenue was US$35.6 billion, a year-on-year increase of 93%, accounting for 91% of total revenue.

Orders for Blackwell architecture GPUs have been scheduled until 2026, and the four major cloud service providers (Microsoft, AWS, Google, and Oracle) have ordered a total of 3.6 million units worth US$140 billion.

In addition, Nvidia plans to launch the Blackwell Ultra chip in 2025 and release the next-generation AI platform Rubin in 2026, using HBM4 memory to further consolidate its technological advantages.

Although the short-term gross profit margin is under pressure due to the high initial production cost of Blackwell chips (the gross profit margin in Q4 of fiscal year 2025 was 73%, a year-on-year decrease of 3.2 percentage points), management expects it to rebound to a mid-to-high level of 70% in the second half of the year.

Analysts are generally bullish on Nvidia, with target prices ranging from $152 to $200, which represents a 10%-46% upside from the current share price.

3. Retail investor enthusiasm and institutional divergence

Retail investors' pursuit of Nvidia has reached an unprecedented height. In June 2025, retail investors invested more than $100 million in Nvidia every day, with a maximum of $300 million in a single week, setting a record.

In the Wall Street Bets section of the Reddit forum, "In Huang we trust" has become a popular slogan, and retail investors regard Nvidia as a "faith stock" in the AI ​​era. This sentiment-driven buying behavior may lead to short-term stock price overshoots, but it also amplifies the risk of a pullback.

In contrast to the optimism of retail investors, institutional investors have diverged. Some hedge funds choose to sell at high levels. Nomura Securities data shows that Nvidia's trading volume accounted for 10% of the total trading volume of the US stock market in January 2025, and institutional selling pressure is significant.

At the same time, Nvidia CEO Huang Renxun plans to sell 6 million shares through the "10b5-1 plan" to cash out more than $800 million, raising doubts about the confidence of insiders in the market.

4. Risks and opportunities coexist

1. Competition and technology substitution risks

Although Nvidia dominates the AI ​​chip market, its competitors are catching up at an accelerated pace. AMD's MI300 series chips have increased their market share in supercomputing centers to 25%, and Intel's Gaudi3 chip has seized the inference market through a low-price strategy.

In addition, the trend of cloud service providers developing their own chips has intensified. The cost of AWS Trainium2 and Google TPU v5 is 40% lower than that of Nvidia, and the self-use rate exceeds 70%. If the demand for AI computing power does not grow as expected, Nvidia's market share may be eroded.

2. Valuation and policy risks

Nvidia's current price-to-earnings ratio (TTM) is 44.31 times, higher than the semiconductor industry average of 28 times. Seaport Global Securities warned that the AI ​​benefits have been fully digested by the stock price, and if the revenue growth rate slows to 30% in fiscal 2025, the valuation bubble may burst.

In addition, the US has upgraded its chip export restrictions on China, and the sales of the special version of H20 chips in the Chinese market have been lower than expected, which may affect its growth prospects.

3. Interest rates and macroeconomic environment

The Federal Reserve is expected to cut interest rates twice in 2025, totaling 50 basis points, but there is uncertainty in the policy path. If the inflation rebound leads to the failure of the interest rate cut expectations, the valuation of technology stocks may be under pressure.

In addition, the global economic slowdown may affect corporate AI investment budgets, thereby dragging down Nvidia's order growth.

5. Retail investment strategy recommendations

1. Long-term investors: focus on fundamentals and technical support

For long-term investors, Nvidia's AI leadership and industry growth dividends remain attractive. You can build positions in batches when the stock price falls back to the $120-130 range, with a target price of $170 based on the average analyst expectation, and a stop loss of $110 (low point on May 5, 2025).

At the same time, it is recommended to allocate 5%-10% of gold ETFs (such as GLD) to hedge against market fluctuations.

2. Short-term traders: grasp technical signals and market sentiment

Short-term traders can use the fluctuation of the stock price in the $130-140 range to sell high and buy low. If it breaks through the $140 resistance level, it can be chased up to $150; if it falls below the $130 support level, it is necessary to stop losses in time.

In addition, pay close attention to retail sentiment indicators (such as Reddit discussion heat and Robinhood position changes) to avoid taking orders at emotional highs.

3. Risk Averse: Diversification and Hedging Tools

Investors with low risk tolerance can participate in the following ways:

ETF investment: Choose to hold technology stock ETFs (such as QQQ) or semiconductor ETFs (such as SMH) to indirectly allocate Nvidia.

Option strategy: Buy call options with an expiration date of December 2025 and an exercise price of $150. The cost is about 5% of the stock price, which can not only participate in the upward gains but also limit the downside risks.

Industry rotation: Keep the proportion of Nvidia holdings within 10% of the total position, and allocate defensive sectors such as consumption and medical care to balance the risks.

After the stock split, Nvidia's stock price has become more affordable, providing retail investors with a ticket to participate in the AI ​​revolution. However, the increased market volatility, valuation pressure and competitive risks warn investors to remain rational.

For long-term holders, the company's technological advantages and industry growth are still the core logic; short-term traders need to be wary of the risk of chasing highs driven by emotions.