Super Micro Computer, Inc. (SMCI) rode the artificial intelligence (AI) wave to massive gains, becoming a standout supplier of AI-processing servers. The stock soared to a record high of $1,229 in March, outpacing the broader S&P 500 Index’s ($SPX) returns thanks to its impressive revenue and profit growth.
But as investors took profits, the company's announcement of its first-ever 10-for-1 stock split, set for October, reignited interest in SMCI. Stock splits often act as magnets for investors, lowering share prices and making the stock more accessible to the broader investor base. Plus, historically, stock splits have led to an around 25% to 30% increase in share price, comparing very favorably with the S&P 500's average annual return of around 10% to 12%.
