Time is running out for major changes for these two huge companies.
What makes stocks rise over a short period of time? Something big needs to happen that will provide a catalyst that will send stocks off the ground.
Two of the most followed stocks on the market could soon have such catalysts. Great developments for Apple (AAPL -0.83%) And Nvidia (NVDA 1.45%) are only a few days away. Should you buy both stocks now?
Major events for these two tech giants
Apple’s big news is expected to be announced on June 10. This is when the company’s annual Worldwide Developers Conference (WWDC) begins. As the event runs through June 14, Apple will deliver its keynote presentation on the first day.
Speculation has reached fever pitch about what Apple might announce at this year’s WWDC. Many industry observers expect the company to introduce major new capabilities in artificial intelligence (AI). Apple CEO Tim Cook hinted during the May quarterly conference call, “We can’t wait to reveal what we have in store.” He then commented on Apple’s investments and opportunities in generative AI, adding fuel to the fire of anticipation that the company would talk about new generative AI tools at WWDC.
Apple’s next major news is shrouded in mystery. No one knows for sure everything the company will announce at its event next week (although there is no shortage of predictions). It’s a different story for Nvidia, however. Investors know exactly what awaits them.
Nvidia will conduct a 10-for-1 stock split after the market closes on Friday, June 7. All record holders of its common stock as of market close on Thursday, June 6 will receive nine additional shares. Nvidia will begin trading at a lower split-adjusted stock price when the market opens on Monday, June 10. This is arguably the most anticipated stock split of the year.
Buy Apple and Nvidia stock ASAP?
Should you buy Apple and Nvidia as soon as possible to access the shares before their major developments in the coming days? There are simple arguments why the answer might be yes.
Apple could impress investors with its new AI capabilities and extend the stock’s current rally. Some believe the company could even spark a multi-year super cycle of iPhone upgrades.
Nvidia’s stock split could attract enough retail investors who hadn’t bought the stock in the past due to its high price and spark a new surge for the high-flying stock. The stock split could also pave the way for Nvidia to be added to the group. Dow Jones Industrial Averagea move that would incentivize mutual funds and exchange-traded funds (ETFs) that track the index to buy the stock.
However, there is no guarantee that big news from Apple and Nvidia will be strong catalysts. Apple’s AI announcements could be disappointing. Rumors are already circulating that the company will not introduce any new hardware.
As for Nvidia, many online brokerages already support buying and selling fractional shares, which lessens the impact of a stock split. I don’t think investors should buy Apple and Nvidia just because of the big developments ahead.
The long-term arguments in favor of these actions
Certainly, it’s possible that Apple’s WWDC announcements and Nvidia’s stock split could cause temporary gains for both stocks. The best approach for investors, however, is to focus on the long-term prospects of these companies. And those prospects look good either way.
Regardless of what Apple reveals next week, the company could be in a great position to lead the charge in the edge AI market. So far, the focus on AI has primarily been on cloud applications. Edge AI involves running AI applications on devices where data is created and visualized.
More than 2.2 billion Apple devices, including iPhones and iPads, are in use worldwide. With the right AI strategy, the company could become a big winner in the advanced AI market.
Nvidia remains the 800-pound gorilla in the AI chip market. I think the company’s pace of innovation could keep it on top for years to come. If AI realizes its full potential (and I think it will), Nvidia should continue to be a great stock to own for the long term.
