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This under-the-radar artificial intelligence (AI) stock is now trading above $1,600 per share.
The current surge in artificial intelligence (AI) stocks has initiated a trend of stock splits among high-performing companies. Notable examples include Nvidia's 10-for-1 forward stock split in June 2024 and Broadcom's similar 10-for-1 split a month later. Amidst this backdrop of substantial stock price appreciation, ASML (NASDAQ: ASML), a critical semiconductor equipment manufacturer, has emerged as the next highly probable candidate for a stock split before the end of 2026. Often described by analysts as "the most important company you've never heard of," ASML's shares are currently trading above $1,600, a price point indicative of its significant market value. The company's stock has seen an impressive gain of approximately 120% over the last year, primarily driven by the escalating demand from major foundries like Taiwan Semiconductor Manufacturing, Intel, and Samsung, all of whom rely on ASML's cutting-edge equipment to produce advanced AI chips. Despite this strong performance, ASML has an unconventional history regarding stock splits; it has not executed a forward stock split since 2000, having previously undertaken reverse splits in 2007 (8-for-9) and 2012 (77-for-100) as a method to distribute cash to shareholders without share dilution. However, given the current context of high stock prices among its peers, a forward stock split is now considered likely. While ASML has not made any public announcements regarding such a move, the company's trajectory mirrors those of Nvidia and Broadcom before their respective splits, suggesting an increased probability. A split, while not altering the fundamental value of existing holdings, offers several benefits, including making shares more affordable and accessible to a broader base of small individual investors. Furthermore, a lower share price simplifies advanced investment strategies, such as writing covered calls, by reducing the capital required to purchase 100 shares (which currently exceeds $160,000 for ASML), thereby enhancing the stock's overall appeal and potential for increased trading activity.
Considering ASML's robust share price performance and the prevailing trends within the semiconductor and AI industries, investors are advised to anticipate a stock split from ASML within the current year. Even in the absence of an official declaration from the company, ASML's semiconductor stock is actively trading at price points that are on par with, or even surpass, the pre-split valuations of its significant industry rivals. A forthcoming stock split is expected to yield multiple advantages. Primarily, a more accessible share price would effectively broaden the investor base, drawing in a greater number of small individual investors who might otherwise find the current high price prohibitive. Secondly, it would streamline the execution of various investment strategies, notably facilitating the process of writing covered calls, which typically requires owning 100 shares. This accessibility could significantly boost overall interest and engagement with ASML's stock. Ultimately, by adjusting its share price to a more granular level, ASML would be strategically positioned to foster further growth and deepen its market penetration, especially capitalizing on the burgeoning interest in artificial intelligence stocks, even for those investors who may not yet be intimately familiar with the company's pivotal role in the industry.