Wall Street Stock-Split Outlook: Insights for Investors

A recent report discusses the impact of stock splits on investor sentiment and company performance in 2024, specifically highlighting Super Micro Computer and Lam Research as potential growth stocks amid challenges.

Date: 17-12-2024

AI Rating: 5

The report provides a compelling overview of the stock market dynamics in 2024, focusing on stock splits and their perceived correlation with company performance. Notably, two companies, Super Micro Computer and Lam Research, have been identified as key players within this framework.

Super Micro Computer

Super Micro Computer's implication for growth is underscored by an impressive 110% revenue growth year-on-year, reaching nearly $15 billion. This growth can be attributed to its strategic integration of Nvidia's GPUs, making it attractive for investors. However, the company is currently facing significant issues, particularly allegations of accounting manipulation from Hindenburg Research. This creates uncertainties around its future profitability and stability, placing a cloud over its growth potential.

Lam Research

Lam Research is positioned favorably as a semiconductor equipment supplier benefitting from the AI sector's expansion. The forecast for Lam suggests an upside of 49%, with the company's focus on high-bandwidth memory devices essential for AI applications. Nonetheless, the firm is grappling with geopolitical risks, particularly concerning its revenue dependency on China, which could be exacerbated by potential trade barriers under a new administration.

Overall, while the earnings potential and market positions of these companies suggest a favorable outlook on paper, the underlying risks — especially surrounding Super Micro's accounting issues and Lam's exposure to regulatory environments — might deter some investors.

Stocks: NASDAQ: SMCI NASDAQ: LRCX NASDAQ: NVDA