Stock splits have gained popularity again in recent years. While this procedure was common during the 1990s, it had fallen into obscurity until enjoying a renaissance in the last decade. Typically, companies undertake a stock split after years of strong operating and financial results that have driven an increase in the share price. The prospect of a stock split is often a reason for investors to take a fresh look at the company in question, and rightly so.
The strong corporate performance that ultimately led to the stock split in the first place tends to continue, driving further gains. Research shows that companies that initiated a stock split typically return an average of 25% in the year following the announcement, compared with average increases of 12% for first-timers. S&P 500 IndexAccording to data collected by Bank of America Analyst Jared Woodard.
Below are three split stocks that still have a long way to go, according to select Wall Street analysts.
Nvidia: 82% implied upside potential
The first stock split with a lot of upside potential is Nvidia (NASDAQ: NVDA)The company has become the de facto standard-bearer for recent advances in artificial intelligence (AI) thanks to its pioneering work with graphics processing units (GPUs).
It turns out that the same chips that revolutionized the gaming industry work just as well at speeding up the sending of data across the ether, making them the go-to choice among cloud computing and data center operators. They also speed up the processing of AI models, which helped Nvidia become the gold standard for generative AI.
In the second fiscal quarter of 2025 (ended July 28), Nvidia generated record quarterly revenue that increased 122% year-over-year to $30.0 billion, leading to diluted earnings per share (EPS) that increased 168% to $0.67. The bright spot was the spectacular performance of the company’s data center segment (which includes AI chips), as sales soared to $26.3 billion, an increase of 154%.
The rise of AI has fueled a blistering rise in Nvidia’s stock price, which has gained 716% since the start of 2023 and led to its viral 10-for-1 stock split in June. The stock has seen a pause in recent months as investors questioned the staying power of one of the market’s best-performing companies, but many on Wall Street believe AI adoption is just beginning — a trend that favors Nvidia.
In an interview on CNBC earlier this month, Niles Investment Management founder Dan Niles said he “strongly believes” that over the next few years, Nvidia’s revenue and The stock price is set to double from current levels, driven by demand for AI. That suggests potential gains for investors of 82% compared to Wednesday’s closing price.
He’s not alone in thinking the future is bright. Of the 60 analysts who covered the stock in August, 55 rated it a buy or strong buy, and 10 none Recommended sale.
I have made no secret of my bullish view on Nvidia and have predicted the stock will top $200 by 2026, and I stand by that prediction.
Nvidia stock is currently selling for 39 times forward price. While this may seem steep at first glance, consider this: Wall Street expects the company’s earnings to grow 53%, on average, over the next five years, proving that Nvidia stock deserves a premium.
Sirius XM Holdings: Implied Upside Potential of 179%
The second stock split with significant upside potential is Sirius XM Holdings (NASDAQ: SIRI)The company is unrivaled when it comes to satellite radio services in North America. Sirius has 34 million paying subscribers and its audience grows to 150 million if its ad-supported streaming service Pandora is included, so its listener base is unrivaled.
The high levels of inflation that marked the past two years forced people to make tough choices with their disposable income, with some choosing not to renew their Sirius subscription. This, combined with fundamental investor misunderstanding of its recent merger and the resulting reverse stock split, has contributed to the stock falling 56% year-to-date. While the results were weak, the share price drop is clearly an overreaction.
In the second quarter, Sirius’ revenue fell 3% year-over-year to $2.18 billion, while earnings per share of $0.08 were unchanged. While the number of paid subscribers declined by 100,000 (or about 1.5%), this was an improvement as its churn rate continues to slow ahead of an expected turnaround.
Despite the share price weakness, some on Wall Street believe the selling was overdone. Benchmark analyst Matthew Harrigan is one of them. He maintains a buy rating on Sirius XM, with a split-adjusted price target of $65. That represents 179% upside potential compared to Wednesday’s closing price. The analyst cites “market dislocation” due to its recent merger with Liberty tracking stock Sirius XM. Additionally, he believes management’s “strategic initiatives” will pay off.
Furthermore, the falling share price offers astute investors an attractive valuation. Sirius XM currently sells for roughly 7 times earnings, which assumes little to no future growth.
I think the analyst’s opinion is correct, as the improving macroeconomic situation should revive Sirius XM’s growth, which will likely push the stock higher.
Super Micro Computer: Implied Upside Potential of 243%
The last company in our trio of split stocks with room to grow is Supermicrocomputer (NASDAQ: SMCI)commonly referred to as Supermicro. The company has been designing custom servers for over 30 years and the accelerated adoption of AI has taken demand to the next level.
The secret to the company’s success is the modular architecture of Supermicro’s rack-scale servers, which allows customers to design a system to meet their specific needs. Additionally, the company is the leading provider of direct liquid cooling (DLC) servers, which have become virtually a staple in the era of AI-centric data centers. CEO Charles Liang suggests that Supermicro’s DLC market share currently sits between 70% and 80%.
In the fourth fiscal quarter of 2024 (ended June 30), Supermicro reported record revenue that increased 143% year-over-year to $5.3 billion, which also increased 38% sequentially. The resulting adjusted EPS increased 78% to $6.25.
Investors sold shares after the report as concerns about the company’s declining profit margins prompted a knee-jerk reaction. Liang said a shift in product mix caused by component bottlenecks was to blame, a situation that should be rectified soon.
Supermicro’s track record of strong earnings has pushed its stock price up 432% since strong demand for AI-focused systems began in early 2023. This prompted the company to initiate a 10-for-1 stock split early last month.
Loop Capital analyst Ananda Baruah maintains a buy rating on the stock and a Wall Street-high price target of $1,500. That represents a 243% upside potential compared to Wednesday’s closing price.
The analyst is bullish on Supermicro’s place in the AI server market, citing its leadership in scale and complexity. He estimates the company’s sales will accelerate to a $40 billion rate by the end of fiscal 2026, extending management’s guidance for revenue of $28 billion in fiscal 2025.
I think the analyst is right on the mark, as Supermicro continues to gain market share at the expense of its rivals.
On Wall Street, many agree. Of the 18 analysts who offered an opinion in August, nine rated the stock as a buy or strong buy, and none recommended selling it.
Plus, at 22 times earnings and less than two times sales, Supermicro is the very definition of an attractively priced stock.
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Bank of America is an advertising partner of The Ascent, a Motley Fool company. Danny Vena has positions in Nvidia and Super Micro Computer. The Motley Fool has positions in Bank of America and Nvidia and recommends them. The Motley Fool has a disclosure policy.
3 Stocks Hit by Stock Splits That Are Worth Buying Before They Soar 243%, According to Some Wall Street Analysts. was originally published by The Motley Fool