FX Evolution: Most People Will Ignore This Stock Market Warning Sign

Nvidia (NVDA) has been the market darling for the past 18 months. The rise of AI technologies means that the semiconductor designer has become the top play for investors.

While shares of Nvidia have soared, what’s more impressive is that this price move is still lower than the company’s surging earnings and revenues. However, there is an unusual event surrounding Nvidia that could mean some market trouble ahead.

That sign? Nvidia’s recent stocks split. On Monday, shares split 10-for-1. A holder of shares at $1,200 now has 10 shares valued at $120.

In theory, stock splits make it less expensive for smaller investors to acquire a position in a company. It also makes trading easier as well.

However, each of the prior share splits by Nvidia specifically have come ahead of a bear market for stocks. That includes the last split in 2021 that came ahead of the 2022 bear market.

But going into both the dotcom crashes and the global financial crisis, a similar story unfolded.

While this indicator has worked in the past and has no guarantee moving forward, it’s a sign for caution. With a market cap of $3 trillion, Nvidia recently became the second-largest company by market cap.

Further exceptional gains from those of recent years seem less likely going forward. And with Nivdia making up a big part of market indices, a selloff could mean the overall markets sell off too.

To view the full danger Nvidia’s recent stock split poses, click here.