Arista Networks (ANET) and Palo Alto Networks (PANW) in December will split their stocks, joining Nvidia (NVDA), Broadcom (AVGO) and Super Micro Computer (SMCI) this year. Nvidia stock has soared 179% in 2024, but only 16% of the gain came after its 10-for-1 stock split on June 10.
Arista stock will split 4-for-1 on Dec. 4. Palo Alto stock will split 2-for-1 on Dec. 16. Shares in Arista, a computer network gear maker, have advanced 74% in 2024. Cybersecurity firm Palo Alto is up 32%.
“Boards are paying more attention to their stock price range these days, as they seek to expand their shareholder base via a more ‘acceptable’ price range,” S&P analyst Howard Silverblatt told IBD.
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Stock Splits: Good Or Bad?
In the long run, the stock splits are geared to make shares more affordable for retail investors.
Another benefit is that liquidity, or the ease with which shares can be bought and sold, tends to increase. Institutional investors generally favor stocks with higher trading volume as that can reduce the costs of building a large position and of selling shares.
Semiconductor equipment maker Lam Research (LRCX) also is among tech companies that announced stock splits this year.
Super Micro Computer announced a 10-for-1 stock split on Oct. 1. Supermicro stock plunged in November amid accounting issues. In 2024, Supermicro has now gained 24%.
Further, Broadcom stock has gained 43% this year. But Broadcom stock has retreated 6% since the 10-for-1 stock split on July 15.
In addition, Microsoft (MSFT) divided its stock 2-for-1 in March, 2023. Microsoft stock has gained 12% in 2024.
In 2022 several tech stocks split, including Google-parent Alphabet (GOOGL), Amazon.com (AMZN) and Shopify (SHOP).
Google stock and Amazon stock both split 20-for-1.
In 2024, Google stock has gained 22% while Amazon has jumped 38%.
Palo Alto Platform Strategy
In the quarter ended Oct. 30, Palo Alto earnings rose 13% to $1.56 per share on an adjusted basis. Further, revenue for Palo Alto stock climbed 14% to $2.13 billion, including the QRadar acquisition. Analysts had expected earnings of $1.48 a share on sales of $2.12 billion.
Palo Alto’s annual recurring revenue from cloud computing products rose 40% to $4.5 billion, topping estimates of $4.37 billion. Chief Executive Nikesh Arora has leaned into a cloud platform strategy to drive next generation ARR growth.
For the three months ended Sept. 30, Arista earnings rose 31% to $2.40 per share on an adjusted basis. Also, revenue rose 21% to $1.81 billion.
Analysts estimated earnings per share of $2.08 on revenue of $1.76 billion.
For 2025, Arista forecast revenue growth of 15% to 17% to nearly $8 billion.
Follow Reinhardt Krause on Twitter @reinhardtk_tech for updates on artificial intelligence, cybersecurity and cloud computing.
