Forget Waiting for an Nvidia Split: NVDA's Real Value Has Nothing to Do With Share Price

Nvidia (NASDAQ: NVDA) is highly unlikely to conduct a stock split in 2026, even after recently reaching a new all-time high. The leading chipmaker hasn't announced one, and its previous splits came when its share price was much higher.

It's usually not a good idea to wait for a company to split its stock before you invest. In Nvidia's case, you'd probably be waiting a very long time, and you'd be missing out on a quality company.

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Why an Nvidia stock split probably isn't happening in 2026

A few numbers make it clear why a stock split isn't on the horizon for Nvidia. The first is its share price. Companies usually split their stock to make it more affordable for retail investors. When Nvidia conducted its last stock split, a 10-for-1 split in 2024, it was trading at about $1,200. Before that, it conducted a 4-for-1 split in 2021 when it was trading at about $750.

Nvidia closed at $239 on Oct. 6. Its share price would need to be roughly three to five times larger to be in the same range as during its previous stock splits.

That brings us to the second important number: Nvidia's market cap of $5.8 trillion. If the company were to grow three times larger, it would have a market cap of more than $17 trillion. In all likelihood, Nvidia won't need to split its stock again for the rest of the decade.

Nvidia is set up well for continued growth

One of the main reasons some investors are reluctant to buy Nvidia is its size. It already tops the list of the world's largest public companies, so there's the question of how much it can continue to grow from here.

But companies continue to spend heavily on artificial intelligence (AI), and Nvidia is reaping the benefits. It reported $96.2 billion in revenue in Q2 FY 2027, up 106% year over year, on an excellent gross margin of 75%. Most of that ($89 billion) is data center revenue, as Nvidia makes the most popular AI chips, including its Blackwell and Vera Rubin lines.

Even after Nvidia's recent growth, it's reasonably valued for one of the top AI stocks. It trades at about 26 times forward earnings and has a forward price/earnings-to-growth (PEG) ratio of less than 0.3. A PEG ratio below 1 indicates a company may be undervalued, and Nvidia is well below that mark.

Nvidia is doing the opposite of a split, and that's good news for investors

A stock split increases a company's number of shares without changing the value of your position or your ownership stake. If a company trades at $500 and carries out a 5-for-1 split, each $500 share becomes five new $100 shares.

Nvidia, on the other hand, is buying back shares. On Sept. 28, the company announced that its board of directors authorized a $150 billion increase to its share repurchase program, increasing the program total to $235 billion. It expects to execute the total remaining through its fiscal 2028, essentially the next five quarters and change.

Buybacks are generally better for investors than stock splits because they reduce the number of outstanding shares. Each share has a larger ownership stake, and earnings per share (EPS) rise. The fact that Nvidia's board authorized a $150 billion increase suggests management considers the stock undervalued, and it's a large commitment to return capital to shareholders.

Nvidia's value isn't about the share price

The real value of Nvidia is its crucial role in the AI build-out. Tech companies are investing in AI infrastructure, with the four largest hyperscalers (Alphabet, Amazon, Meta Platforms, and Microsoft) reporting over $300 billion of capital expenditures in the first half of 2026, according to research by The Motley Fool. Even with increased competition from Advanced Micro Devices and custom chipmakers, Nvidia still has an estimated 75% share of the AI accelerator market.

There are valid concerns about Nvidia. My primary worry is that it's heavily dependent on AI spending, and if companies slow down that spending, Nvidia's performance would suffer.

However, given how AI is progressing and its role as a potentially transformative technology, I expect the AI build-out to continue. If you're bullish on AI, then Nvidia is still worth considering as an investment, especially considering its growth and affordable valuation.

Lyle Daly has positions in Alphabet, Meta Platforms, and Nvidia. The Motley Fool has positions in and recommends Advanced Micro Devices, Alphabet, Amazon, Meta Platforms, Microsoft, and Nvidia. The Motley Fool has a disclosure policy.