3 Stock-Split Stocks You Should Buy in Fistfuls Before They Rise Up to 204%, According to a Selection of Wall Street Analysts

One of the most intriguing developments for investors over the past few years has been the resurgence of stock splits. While the practice was common in the late 1990s, it declined in popularity but has enjoyed a resurgence in recent years. This corporate action is typically undertaken in response to years of strong operating and financial performance, which ultimately fuels a boom in stock prices.

History shows that the most successful companies tend to continue firing on all cylinders. Companies that conduct forward stock splits generate an average 25% share price increase in the year following the announcement, compared with an average gain of 12% in the year S&P500according to the data collected by Bank of America analyst Jared Woodard.

Here are three stock split companies that some Wall Street analysts say have growth potential.

Broadcom: Alleged growth potential of 76%

The first split stock that has a big growth potential is Broadcom (AVGO 1.73%)The company holds an enviable position in technology circles, providing a broad range of software, semiconductor and security solutions spanning the wireline, broadband, mobile and data center spaces. Broadcom claims that “99% of all internet traffic passes through some form of Broadcom technology,” giving it a critical position in the ongoing artificial intelligence (AI) revolution.

The latest results show that business is booming. In the second quarter, revenue of $12.5 billion increased 43% year over year, driving adjusted earnings per share (EPS) of $10.96, which increased 6%. Notably, the recent acquisition of VMWare is weighing on the company’s profit margin, which management expects to normalize by 2025. The company expects to continue its strong growth, raising its full-year revenue forecast to $51 billion, which would represent a 42% increase.

A history of execution and solid growth led to a 10-for-1 split in Broadcom shares in mid-July. Despite a 152% gain since the beginning of last year, many on Wall Street remain incredibly bullish. Just before the split last month, Rosenblatt analyst Hans Mosesmann reiterated his buy rating and raised his price target to $240 after the split, implying a potential upside for investors of 76% from Wednesday’s closing price.

The analyst believes that accelerating adoption of generative AI will drive more sales of AI-related hardware, including applied-special integrated circuits (ASICs), networking, and switching chips. He also expects VMWare integration to start making a significant contribution.

He is not alone in his bullishness about Broadcom. Of the 38 analysts who expressed an opinion on the stock in July, 33 rated the stock a buy or strong buy, while nothing recommended sale.

Nvidia: Alleged growth potential of 99%

The second split stock with great potential is Nvidia (NVDA -0.21%). The company is a leading supplier of graphics processing units (GPUs) used in video games, cloud computing, and data centers. This helped Nvidia quickly dominate the market for chips used in generative AI, significantly boosting its sales because these GPUs provide the computing power needed for AI.

In the first quarter of fiscal 2025 (ended April 28), Nvidia generated record revenue of $26 billion, up 262% year over year, resulting in diluted earnings per share of $5.98, up 629%. This was driven by the data center segment, which includes AI processors, which saw revenue increase 427% to $22.6 billion.

Nvidia’s breakout results have boosted its stock price by 600% since the start of 2023, leading to a much-hyped 10-for-1 stock split in June. But some on Wall Street think there’s more to come. Mosesmann has a buy rating on Nvidia and a Street-high price target of $200, implying a potential upside of 99% from Wednesday’s closing price.

The analyst believes many of his peers don’t understand the importance of software integrated into Nvidia’s AI processors, which gives it a serious competitive advantage. “We expect this aspect of software to grow significantly over the next decade in terms of the overall sales mix, with valuations trending upwards due to sustainability,” Mosesmann wrote in a note to clients.

He’s not the only one who thinks there’s still a long way to go. Of the 58 analysts who covered the stock in June, 53 rated the stock a buy or strong buy, while nothing recommended sale.

Supermicrocomputer: Alleged growth potential of 204%

The last of our three split actions with a lot of room to maneuver is Super microcomputer (SMCI -0.23%)Also known as Supermicro, the company has been providing custom servers to the technology industry for over 30 years. Supermicro’s approach to rack-scale servers with direct liquid cooling technology is ideal for the rigors of AI processing, as is the company’s legendary focus on energy efficiency.

Supermicro has established strong working relationships with all major chip manufacturers, giving it access to the most desirable processors, including those from Nvidia, Advanced Micro DevicesAND Intel.

In the fourth quarter of fiscal 2024 (ended June 30), Supermicro generated record revenue of $5.3 billion, up 143% year-over-year and 38% quarter-over-quarter. As a result, adjusted earnings per share (EPS) was $6.25, up 78%.

While some investors were concerned about the company’s profit margin decline, CEO Charles Liang pointed to a bottleneck involving some server components that pushed some deals into the next quarter. That, in turn, changed the product mix to include more lower-margin sales. He expects a rebound in the coming quarters.

Supermicro’s solid performance since the beginning of last year has sent its stock up 516%, prompting the company to announce a 10-for-1 stock split this week. Some on Wall Street believe this is just the beginning. Loop Capital analyst Ananda Baruah has given the stock a buy rating and a $1,500 price target. That represents a potential upside of 204% from Wednesday’s closing price.

The analyst believes investors are still underestimating Supermicro’s sales potential, suggesting it could hit revenue of around $40 billion in fiscal 2026, down from less than $15 billion at the end of fiscal 2024. Management is forecasting similar results, predicting net sales of around $28 billion at the midpoint of fiscal 2025 guidance.

Wall Street seems to agree. Of the 17 analysts who provided an opinion in July, 12 rated the stock a buy or strong buy, while nothing recommended sale.

Note on pricing

Each of these stock-split stocks has a long way to go, but despite their prospects, they remain attractively valued. Nvidia, Broadcom, and Supermicro are currently trading at 36 times, 29 times, and 14 times forward earnings, compared to a price-to-earnings (P/E) ratio of 27 for the S&P 500. While two of the three stocks command a small premium to the broader market, their track record, impressive share price gains, and solid future potential make them worth every penny.