When a company as big as Loblaw Companies (TSX:L) decides to split its stock, it is not just a technical adjustment but a signal worth paying attention to. On August 19, Loblaw completed a four-for-one stock split, handing out three new shares for every one previously held. This move instantly reduced the trading price per share, making it easier for more investors to jump in, while leaving overall shareholder value unchanged.

Loblaw has been showing healthy sales momentum, stronger profitability, and a stock price that has outpaced the market. In this article, I’ll dive into what this split really means for investors today and those thinking of buying in.

A closer look at Loblaw’s business and stock performance

As Canada’s largest food and pharmacy retailer, Loblaw currently operates over 2,800 locations under banners like Real Canadian Superstore, Shoppers Drug Mart, Joe Fresh, and President’s Choice.

Loblaw stock has been on a tear of late. After rallying by 34% over the last year, its shares were trading at $58.76 post-split as of August 19, with a market cap of $68.4 billion. By comparison, the TSX Composite has risen around 21% in the last year.

Loblaw also pays a modest quarterly dividend with an annualized yield of just under 1%.

What’s driving Loblaw stock higher in 2025

The recent surge in Loblaw stock could mainly be attributed to consistent growth across its food and drug retailing segments. In the second quarter of 2025, the company posted revenue of $14.7 billion, up 5.2% YoY (year-over-year).

The grocery retailer’s profitability has been improving as well. Last quarter, its operating profit jumped 42.7% YoY to $1.2 billion, while adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) climbed 7.4% to $1.8 billion. Similarly, the Canadian retailer’s net profit climbed by 8.6% YoY to $721 million with the help of higher customer traffic, bigger basket sizes, and lower amortization costs tied to past acquisitions.

What the Loblaw stock split means for investors

That brings us back to the Loblaw stock split itself. By issuing three additional shares for every one outstanding, the company instantly lowered the trading price per share without changing the overall value of each investor’s holdings. For existing shareholders, nothing was diluted. If you owned 100 shares before, you now own 400 shares, and your percentage ownership of the company remains the same.

For new investors, the lower per-share price after the split makes it easier to buy into the company. This accessibility matters for retail investors. The move is also expected to improve trading liquidity, making it simpler for investors to buy and sell shares without large price swings.

Most importantly, Loblaw’s stock split signals confidence from its management as it would not be taking this step if it were not confident about its financial health and growth prospects. With revenue and earnings climbing, a growing store network, and a share price that has consistently beaten the broader market, the split looks like a well-timed decision.

For investors who already hold Loblaw stock, the message is simple: the company is on solid ground and is opening the door for even greater participation. For those considering a position on the TSX today, the split could be the perfect opportunity to step in at a more approachable entry price, backed by a business that continues to deliver results.

The post Loblaw Stock Split: What It Means for Investors appeared first on The Motley Fool Canada.

More reading

• The Best Canadian Stocks to Consider If You Have $2,000 to Invest
• The Canadian Stocks Worth Owning When a Trade War Hits
• 3 Dividend Stocks I Believe Belong in Almost Every Investor’s Portfolio
• 3 Blue-Chip Dividend Stocks for Canadian Investors
• The Absolute Best Canadian Stocks to Buy and Hold Forever in a TFSA

Fool contributor Jitendra Parashar has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Which company is the center of attention this week? It’s Nvidia (NASDAQ: NVDA), hands down. The chipmaker is set to announce its second-quarter earnings results any moment now.

I fully expect Nvidia’s numbers to delight investors again, enabling it to extend its already impressive gains this year. But there’s another stock-split stock that could also soar if Nvidia delivers a blowout Q2 update.

Joined at the hip

Super Micro Computer (NASDAQ: SMCI), also called Supermicro, is arguably joined at the hip with Nvidia. The company provides server and storage solutions that are especially popular in data centers.

The same artificial intelligence (AI) tailwind fueling Nvidia’s growth also helps Supermicro. Charles Liang, Supermicro’s president and CEO, said earlier this month that his company “continues to experience record demand of new AI infrastructures.” As a result, Supermicro’s revenue in the fourth quarter of its fiscal 2024 soared 110% year over year.

If Nvidia handily beats expectations with its Q2 results on Wednesday (and, more importantly, if the company’s guidance is strong), it will bode well for Supermicro’s fortunes over the near term. I look for Nvidia to also provide some clarity on the timing of when chips based on its new Blackwell architecture will begin shipping. This should also help Supermicro, which has liquid-cooled AI superclusters ready to support Blackwell.

Sure, Liang maintains that a delay for Blackwell won’t impact Supermicro much because it does business with other chipmakers. Make no mistake about it, though: Good news from Nvidia will translate to good news for Supermicro.

Will Supermicro’s stock split provide another catalyst?

I don’t think there’s much doubt that a blow-out Nvidia Q2 update would provide a catalyst for Supermicro. But what about the company’s 10-for-1 stock split scheduled for Oct. 1? It’s iffy, in my view.

For one thing, Supermicro’s stock split won’t change anything at all about the company’s underlying business or its growth prospects. On the other hand, spectacular guidance from Nvidia would likely mean stronger growth ahead for Supermicro.

Any investor who really wanted to buy shares of Supermicro could do so even with its share price trading in the ballpark of $600. Many online brokerages support buying fractional shares.

However, this will be Supermicro’s first stock split. I’ll admit that it’s possible some investors who have remained on the sidelines could view the split as a great opportunity to buy the stock. I suspect the allure to invest in Supermicro could be even greater if the stock indeed soars as I expect it will following Nvidia’s quarterly update this week.

Is Supermicro a better stock to buy than Nvidia?

Now for an even more important question: Is Supermicro a better stock to buy than Nvidia? Wall Street seems to think so.

The consensus 12-month price target for Supermicro of analysts surveyed by LSEG in August reflects an upside potential of over 50%. By comparison, the average price target for Nvidia is slightly lower than its current price.

I agree that Supermicro is a better pick than Nvidia. My primary reasoning is valuation. Supermicro’s shares trade at a much lower forward earnings multiple than Nvidia’s. But if Nvidia gives great news to investors on Wednesday, both of these stocks should be big winners.

The post This Stock-Split Stock Could Soar If Nvidia Delivers a Blowout Q2 Update appeared first on The Motley Fool Canada.

More reading

• Here’s the Average TFSA and RRSP at Age 45
• Billionaires Sold Nvidia Stock and Bought This Canadian Stock in Bulk Last Quarter

Fool contributor Keith Speights has no position in any of the stocks mentioned. The Motley Fool recommends Nvidia. The Motley Fool has a disclosure policy.

Stock splits are all the rage this summer with several high-profile companies choosing to execute the move. Nvidia probably attracted the most attention as it was the hottest stock on the market well before its split, but other big names like Chipotle and Broadcom joined in on the fun.

Why? Stock splits, in this case forward stock splits, happen when a company’s share price gets to a level that makes it difficult for a significant portion of the market to buy in. In other words, it’s too expensive for the average Joe. The company issues stockholders more stock and proportionally reduces the price at which each share trades.

So in the end, you have more shares, but the total value of all your investments hasn’t changed because the shares cost less. However, even though the value in theory doesn’t change, more often than not a forward split is followed by positive movement in the stock price. They tend to be good news for investors.

So who might be next? Well, it’s impossible to know for sure, but there’s one artificial intelligence (AI) company that I think could split its stock sooner rather than later.

Meta is riding high on huge earnings after delivering big time

A far cry from its beginnings as “The Facebook,” Meta Platforms (NASDAQ: META) evolved dramatically over the years into the global social media powerhouse it is today. With 3.27 billion daily active users, Meta is ingrained in the lives of a significant portion of the world.

The company just released monster earnings for Q2 2024, beating Wall Street’s already healthy expectations. The company posted 22% year-over-year growth in revenue and a whopping 73% jump in earnings per share.

Lots of different factors went into it. The company is much leaner these days, following layoffs in the last year that reduced the headcount and overhead. Revenue growth, though, comes from the continued growth of Meta’s user base and the frequency and price of its ads. Meta’s entire bottom line is driven by advertising, at least at this point. CEO Mark Zuckerberg is continuing to double down on his metaverse play — we’ll see how that plays out. The company served 10% more ads while charging 10% more for the service.

Advertisers love Meta’s apps because people who use them are extremely engaged. Furthermore, Meta began incorporating AI into its algorithms, serving ads in an even more effective manner and serving more targeted content to users who keep them using the apps.

Meta’s stock looks ripe for a split

When the earnings were released, the company’s stock jumped nearly 5% the next day and another 8% since. Now around $530 a share, it is the most expensive stock by price in the “Magnificent Seven.” It is also the only one that has yet to split its stock.

There is no set price at which companies decide to pull the trigger. Nvidia’s stock was trading around $1,200 when it split; Alphabet‘s was trading around $2,700. Some companies do it at a much lower price, though. The last time Apple split its stock it was trading just shy of $500. Meta’s current $530 is more than enough to justify a split and considering the move’s popularity as of late, I think there is a solid chance it could happen in the near future.

Stock splits are not a reason to buy a stock, however. Meta’s fundamentals make it a stock that you should have in your portfolio. It is delivering where it needs to consistently while investing money into the future. And even if Zuckerberg’s vision for the metaverse doesn’t pan out, the company is still in a strong position to succeed.

The post Is This Unstoppable AI Stock The Next Big Stock Split? appeared first on The Motley Fool Canada.

More reading

• The Only Stocks You Need to Capitalize on AI Spending
• Should You Buy Enbridge Stock While It’s Below $75?

Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool’s board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Fool contributor Johnny Rice has no position in any of the stocks mentioned. The Motley Fool recommends Alphabet, Apple, Chipotle Mexican Grill, Meta Platforms, and Nvidia. The Motley Fool has a disclosure policy.

We’ve had some major stock splits so far in 2024. Chipotle Mexican Grill conducted a 50-for-1 split. Nvidia had a 10-for-1 stock split. Walmart split its shares 3-for-1. And there have been more with others on the way.

Some investors might be leery of buying any stock right now, whether it’s conducted a split or not. The major indexes fell sharply earlier this week on worries about a potential recession and the Bank of Japan’s interest rate hike.

However, I think the pullback presents a great opportunity for forward-thinking investors. Here’s the hands-down best stock-split stock to buy in August despite the market sell-off.

Two-factor authentication

I won’t keep you in suspense. My pick for the best stock-split stock to buy this month is… Broadcom (NASDAQ: AVGO). Why Broadcom? I think two factors especially stand out. But they have nothing to do with the semiconductor maker’s 10-for-1 stock split conducted in July.

The first factor behind my choice of Broadcom is its growth prospects. Broadcom’s revenue soared 43% year over year in the second quarter of 2024, fueled by the demand for its artificial intelligence (AI) solutions and the company’s acquisition of VMware. I expect AI and VMware will remain key growth drivers going forward.

Nobody handles networking AI accelerators better than Broadcom. It’s not surprising that seven of the eight largest AI superclusters in the world rely on the company’s networking technology. Broadcom projects that its AI networking revenue growth will accelerate.

Since closing the acquisition of VMware, Broadcom has signed up around 3,000 of its 10,000 biggest customers to build an on-premises self-service virtual private cloud. Most of these are multi-year contracts, so the revenue will flow for a long time to come. Broadcom will no doubt focus on getting more of these large customers on board with VMware as well.

The second factor that’s key to my case for Broadcom is valuation. Broadcom’s shares trade at 23.9 times forward earnings. That multiple is relatively low for a premiere AI stock. The stock’s valuation looks even more attractive with growth projections included. Its price-to-earnings-to-growth (PEG) ratio with five-year growth projections is only 1.06, according to LSEG.

Wall Street is also bullish about Broadcom’s prospects

I’m not alone in my optimism about Broadcom. Wall Street is bullish about the stock, too.

Of the 29 analysts surveyed by LSEG in August who cover Broadcom, 10 rate the stock as a “strong buy.” Another 17 analysts recommend it as a “buy.” The remaining two analysts rate Broadcom as a “hold.”

The average 12-month price target for Broadcom is more than 36% above the current share price. The most pessimistic analyst surveyed by LSEG thinks the stock can rise 9%.

Sure, many Wall Street analysts are also bullish about Nvidia, Chipotle, and Walmart. However, analysts’ price targets for these other stock-split stocks don’t reflect as much upside potential as the average price target for Broadcom does.

Short term vs. long term

Broadcom’s share price is down more than 20% below its high set in June. It’s possible that the macroeconomic concerns weighing on the broader stock market could hold Broadcom back too over the short term.

However, I think the long-term prospects for Broadcom look bright. The current sell-off offers an opportunity to buy a great stock on sale.

The post Here’s the Hands-Down Best Stock-Split Stock to Buy in August Despite the Market Sell-Off appeared first on The Motley Fool Canada.

More reading

• Here’s the Average TFSA and RRSP at Age 45
• Billionaires Sold Nvidia Stock and Bought This Canadian Stock in Bulk Last Quarter

The Motley Fool recommends Chipotle Mexican Grill, Nvidia, and Walmart. The Motley Fool has a disclosure policy.

This article first appeared on our U.S. website.

If you’ve been wanting to buy Nvidia at a cheaper price, you now have the opportunity. The tech giant conducted a 10-for-1 stock split after the market close on June 7, 2024. Nvidia’s share price is the lowest it’s been in years.

Which AI leaders could have monster stock splits on the way after Nvidia? Here are two top candidates and one definite pick.

1. Broadcom

In one sense, Broadcom (NASDAQ: AVGO) has never split its stock. Avago acquired the “old” Broadcom in 2016 and retained its name. The “old” Broadcom had conducted three stock splits before being acquired. However, Avago had never split its shares — and neither has the “new” Broadcom.

Broadcom’s share price currently hovers around $1,600. That’s well above Nvidia’s share price when it split its stock. Although the company’s management team hasn’t hinted at a stock split so far, the timing could be right for one — perhaps a 10-for-1 split along the lines of what Nvidia did.

Broadcom’s networking products are enjoying strong demand in AI data centers. The company isn’t resting on its laurels, though. It recently announced a new portfolio of ethernet adapters specifically designed for AI infrastructure. Broadcom believes its latest product launch “revolutionizes the AI networking landscape.”

2. ASML Holding

ASML Holding (NASDAQ: ASML) has conducted five stock splits in its history. This number includes two reverse stock splits, one in September 2007 and another in November 2012.

There’s a good case that another conventional stock split is due. ASML’s share price tops $1,000 and has remained above $800 throughout most of 2024 so far. However, the company has given no indications that a stock split is in the works.

ASML stands as the only manufacturer of extreme ultraviolet (EUV) lithography machines used to make the most advanced chips. How important is this advantage? Goldman Sachs believes that chips made using EUV “will enable the next wave of AI.”

3. Lam Research

Lam Research (NASDAQ: LRCX) has had two stock splits. However, the most recent one — a 3-for-1 split — came way back in March 2000.

Unlike Broadcom and ASML, Lam definitely has a stock split on the way. Last month, the company announced a 10-for-1 stock split scheduled for after the market close on Oct. 2, 2024. This split makes a lot of sense considering Lam’s shares are trading above $1,000.

Lam is a leading provider of wafer fabrication equipment used in making semiconductors. The company’s AI edge is in storage. AI apps require fast, high-density storage. Lam’s technology enables manufacturing enterprise solid-state drives that are 50 times faster and up to five times more power efficient than hard disk drives, which currently store over 80% of enterprise data.

Are these potential stock-split candidates buys?

I wouldn’t buy any of these stocks solely because of their scheduled (for Lam Research) and possible (for Broadcom and ASML) future stock splits. Stock splits have zero effect on companies’ underlying businesses or growth prospects.

That said, I think all three of these stocks could deliver fantastic gains over the long term as AI continues to drive demand for high-powered chips and the equipment required to make these chips. Broadcom, ASML, and Lam Research should remain at the forefront of the AI chip market.

To be sure, all three of these stocks trade at premium valuations. It’s possible that they could be more volatile than most stocks. However, Broadcom, ASML, and Lam should be good picks for aggressive growth investors.

The post These Could Be the Next Monster AI Stock Splits After Nvidia appeared first on The Motley Fool Canada.

More reading

• 2 Technology Stocks With the Kind of Potential That Could Make Millionaires
• Where Will Enbridge Stock Be in 3 Years?
• Why the Market May Be too Quick to Write Off These Railway and Telecom Stocks
• 2 Dividend Stocks I’d Buy Today and Feel Good Holding for at Least 5 Years
• 2 Canadian Dividend Stocks Yielding 4% That Appear to Have the Goods to Back It Up

The Motley Fool recommends ASML and Lam Research. The Motley Fool has a disclosure policy.

The question is which growth stocks have the potential to grow tenfold in 10 to 15 years. Companies that have a futuristic outlook and are working today to address problems of tomorrow could be a good choice.

Three hacks to build a $1 million tax-free nest egg

The TFSA allows you to invest in stocks listed on popular stock exchanges in Canada and the United States. It also allows you to reinvest your returns or dividends tax-free as long as they are not withdrawn from the account.

TFSA Hack 1: Keep accumulating trending stocks

The first hack is to invest in trending Nasdaq stocks as the TFSA allows you to invest in US stocks without giving up on the tax-free benefit.  Nvidia (NASDAQ:NVDA) is a trending stock you might want to buy, especially after its 10-for-1 stock split, which has made the stock easier to buy for US$135. Nvidia’s growth story will continue for another three to five years as the artificial intelligence (AI) landscape reshapes the digital world.

Nvidia could also take a lead in the smart cities, robotics, or autonomous cars trends. With a US$135 stock price, it will become accessible to more investors, keeping the trade momentum strong. You can keep adding more Nvidia stocks whenever its price falls or you have money.

Other ongoing trends you could consider investing in are the electric vehicles (EV) trend and 5G trend.

TFSA Hack 2: Buy and hold futuristic stocks

The second hack is buying futuristic stocks like those making hydrogen fuel cells. Ballard Power Systems (TSX:BLDP) makes hydrogen fuel cells for commercial vehicles like buses, trucks, forklifts, and marines that assemble at the depot for refuelling. This gives the company bulk orders and addresses the problem of a lack of refuelling infrastructure. The volume-based approach works well as hydrogen fuel cells are still expensive.

Ballard Power System is working towards making them economically feasible and meeting the future demand for zero-emission transportation.

The company enjoys government subsidies but continues to face losses as the fuel cell technology is still in a nascent stage. It may take 5 to 10 years to reach the inflection point. And when the growth triggers, it could grow your money 10 times in less than five years. Nvidia achieved 10 times growth in two years as Chat GPT triggered a generative AI frenzy.

Thus, you can invest $10,000 in Ballard Power System and hold it forever.

TFSA Hack 3: Reinvesting returns to benefit from compounding

Another strategy that can make your TFSA a millionaire is the power of compounding. In compounding, you reinvest the returns to earn interest on the returns. In over 10 to 15 years, the returns multiply at a higher rate and the true power of compounding is unleashed.

BCE (TSX:BCE) stock can help you automate compounding with its dividend reinvestment plan. You can invest a large amount now as the stock trades closer to its 10-year low and lock in a yield of close to 9%. The high yield and telco’s 3% annual dividend growth can accelerate the compounding effect. There is a risk of a dividend growth pause, but the telco will likely compensate for any pause with even higher growth in the following years.

Investor take away

You could consider allocating a certain percentage of your TFSA contribution to each of the above three strategies focusing on growth while mitigating the downside with dividends.

The post 3 TFSA Hacks to Build a $1 Million Tax-Free Nest Egg appeared first on The Motley Fool Canada.

More reading

• BCE vs. Telus: Which Telecom Belongs in Your TFSA?
• 3 High-Yield Dividend Stocks to Power Your Income Stream in 2026
• 3 TSX Dividend Stocks With Payout Ratios That Actually Hold Up to Scrutiny
• 5 TSX Dividend Stocks Worth HoldingThrough the Next 10 Years
• Everything Investors Should Understand About BCE’s Dividend Right Now

Fool contributor Puja Tayal has no position in any of the stocks mentioned. The Motley Fool recommends Nvidia. The Motley Fool has a disclosure policy.

This article originally appeared on The Motley Fool’s U.S. website.

The artificial intelligence revolution has caused a growth surge for the technology’s enablers, most of which reside in the semiconductor sector.

The stock movements for these companies have been so strong that many now trade at very, very high stock prices, setting these AI beneficiaries up for a potential stock split. In fact, AI darling Nvidia (NASDAQ:NVDA) just announced a 10-for-1 split during its first-quarter earnings call.

Stock splits don’t create or destroy any value on their own. After all, if a company has twice as many shares but half the stock price, the company’s total market cap remains the same. However, stock splits can help certain people afford shares if they don’t have a broker that allows fractional share buying. Moreover, splits can increase a stock’s liquidity, which can help lower-bid-ask spreads for trading purposes, and therefore attract larger funds to a stock.

Therefore, even though the following four stocks have already had very strong runs, a split could potentially drive these AI winners to even further upside.

1. Super Micro Computer

One AI stock that has had even better returns than Nvidia over the past three years is Super Micro Computer (NASDAQ:SMCI). Sure, a lot of Super Micro’s recent success is owed to Nvidia’s AI chips, but SMCI’s returns in the stock market have actually been far superior. Since July 2021, the last time Nvidia split its stock, Nvidia is up by five times. But Super Micro’s stock has increased a whopping 25 times over in less than three years. As a result, Super Micro’s stock price has appreciated to about $900 per share as of this writing, setting it up for a potential split.

A good part of that outperformance was a result of Super Micro’s starting from a significantly lower valuation. In the past, its server products were thought of as “commoditized” with a lot of other competitors in the space.

But the AI revolution has exposed the business model strengths CEO Charles Liang had been cultivating for 30 years. Architecting its servers out of, “building blocks,” or creating the smallest possible modules or server components independently, then being able to build servers out of any combination of these components, Super Micro has mass-customization capabilities that enable it to satisfy virtually any customer modification request. Not only that, but the architecture also saves on costs, as parts of a server can be refreshed instead of having to replace an entire system.

Moreover, Liang has stressed energy-efficiency in its server design for some 20 years, far before it was fashionable. But with the enormous electricity needs and costs of AI servers, Super Micro’s efficient designs are finding even more favor today. And with offices right in the heart of Silicon Valley close to Nvidia and other chipmakers, Super Micro is often able to stay ahead of competitors with the latest in-demand features such as liquid cooling, and is often first-to-market with servers containing the latest and greatest chips.

While Super Micro’s P/E ratio has ballooned from the single digits to 50 over just the past few years, it’s also displaying the growth to back it up, with a stunning 200% growth last quarter. As such, I’d expect Super Micro’s share price to at least maintain these valuation levels, with a stock split potentially in the cards.

2. Broadcom

Another AI beneficiary is Broadcom (NASDAQ:AVGO), thanks to two main factors. First, Broadcom makes the world’s leading networking and routing chips with its Tomahawk and Jericho brands, and data center networking needs are exploding thanks to the data-intensive nature of AI.

Second, Broadcom has application-specific integrated chip (ASIC) design IP that third parties can use to make AI accelerators. In this area, Broadcom has landed some big fish, with both Alphabet (NASDAQ:GOOG) and Meta Platforms (NASDAQ:META) using the company’s ASICs to design their own in-house AI accelerators.

As a result of its highly cash-generative business and AI-fueled growth, Broadcom has seen its share price rally to over $1,400 per share. That definitely puts it in the running for a stock-split.

Of course, the AI boost has only been the most recent catalyst pushing Broadcom’s stock. Even before the AI revolution, Broadcom was an impressive winner thanks to CEO Hock Tan’s visionary acquisition strategy. Over the past 18 years under his tenure, Tan has sought to acquire strong semiconductor franchises, then cutting costs as these defensible niche technologies are folded into the Broadcom corporate umbrella.

Then in 2018, Tan expanded Broadcom’s reach when it bought its first software company, California Technologies, diversifying the chipmaker into software, albeit still within its main enterprise infrastructure market. After buying cybersecurity firm Symantec in 2019, Broadcom made its biggest purchase yet in VMware, a software leader that enables hybrid cloud capabilities and data center virtualization. VMware should also benefit from the growth of AI as customers use many clouds with unique capabilities while striving to keep their data safe in their own data centers. As a result of the VMware acquisition, which closed late last year, Broadcom’s software mix has grown to roughly 40% of revenues.

Now, Broadcom isn’t just a chipmaker, but a diversified technology platform company with many ways to win. Look for its profitable growth to remain strong in the years ahead.

3. ASML Holdings

The path to making every leading-edge semiconductor, Nvidia GPUs included, runs through ASML Holdings (NASDAQ:ASML). This is because the Netherlands-based lithography company has a monopoly on key extreme ultraviolet lithography (EUV) technology needed to make today’s most advanced chips.

EUV technology took some 20 years to develop with significant buy-in from ASML’s customers to fund leading research, so don’t think that EUV capabilities can be copied anytime soon. The resulting technology allows for chipmakers to draw extremely fine transistor designs with light wavelengths that do not occur naturally on earth. And ASML’s latest version of EUV, called “high-NA” EUV, can print designs down to widths of just 8nm. ASML is set to rake in the dough from high-NA, just introduced late last year, as these machines currently go for between $300 million and $400 million a pop!

EUV only began to be used commercially in 2018, with the first EUV-enabled products coming out in 2019. So, we are still only at the beginning of the EUV era. As such, ASML has seen its stock rocket 367% over the past five years, reaching $940 per share, thus making it a candidate for a stock split.

4. Lam Research

Like ASML, Lam Research (NASDAQ:LRCX) is a semiconductor equipment leader that has also seen shares rally over the semiconductor bull market. But whereas ASML is the de facto leader in lithography, which draws designs on a silicon wafer using extremely fine light, Lam’s technology does the exacting and painstaking work of etching the printed design and then depositing semiconductor material in extremely intricate patterns to construct the chip.

While Lam doesn’t have a clear monopoly over etch and deposition technology like ASML does with EUV, Lam actually does have a monopoly over certain process steps in the chipmaking process. More specifically, Lam dominates the deposition technology crucial to “stacking” chip components in a vertical fashion. Over the past decade or so, that has led to Lam benefiting from the production of 3D NAND flash chips, in which memory-makers stack storage modules in a “3D” fashion in greater and greater numbers of layers with every generation.

Now, logic and DRAM chips crucial for AI are also “going vertical,” including high-bandwidth memory DRAM that is currently seeing such strong demand from AI applications. In fact, on its January conference call with analysts, Lam management noted it had a 100% market share in certain technologies needed for stacking DRAM modules. And with new gate-all-around transistors and 3D designs making their way into logic chips, look for Lam to get a further AI boost in the years ahead.

That’s why shares have rocketed 385% over the past five years to $941 per share as of this writing, setting this strong compounder up for a possible stock split as well.

The post After Nvidia: 4 Artificial Intelligence (AI) Stocks That Look Ready to Split appeared first on The Motley Fool Canada.

More reading

• Here’s the Average TFSA and RRSP at Age 45
• Billionaires Sold Nvidia Stock and Bought This Canadian Stock in Bulk Last Quarter

Billy Duberstein has positions in ASML, Alphabet, Broadcom, Lam Research, Meta Platforms, and Super Micro Computer and has the following options: short January 2025 $1,840 calls on Super Micro Computer, short January 2025 $110 puts on Super Micro Computer, short January 2025 $125 puts on Super Micro Computer, short January 2025 $130 puts on Super Micro Computer, short January 2025 $280 calls on Super Micro Computer, and short January 2025 $85 puts on Super Micro Computer. His clients may own shares of the companies mentioned. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool’s board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. The Motley Fool recommends ASML, Alphabet, Lam Research, Meta Platforms, and Nvidia. The Motley Fool has a disclosure policy.