Stock splits and artificial intelligence

On Monday, June 10, NVDA, arguably the most important chip manufacturer in the artificial intelligence world since it manufactures the primary chip that all of the other companies need to produce “AI,” began trading after a 10-for-1 stock split. 

Owners of 100 shares at $1,200 per share on the prior Friday looked at their accounts on Monday and were the owners of 1,000 shares at $120 per share. The total value of their investment in the company did not change. Is this positive or negative? Or do we need artificial intelligence to help us figure that out?

I recently read a report that used research conducted by Goldman Sachs who studied 45 stock splits since 2019 in the Russell 1000 (an unmanaged index that cannot be invested in directly). This report revealed: 1) In the week following the announcement of a split, share prices outperformed the equal weighted S&P 500 Index (another unmanaged index that cannot be invested in directly) by an average of 4%; and 2) after the splits took effect, there was no discernible outperformance. Ultimately, and ideally, a company’s stock price is a reflection of its current and expected profits – not just the fact that its shares have split.

I recently talked to a real estate agent who said that they are starting to use AI a good bit to help them write copy for their listings and to help improve their email content. I asked my son if students are using AI in college to write papers. He said that AI is not allowed and that colleges use software to identify AI content. Nathaniel Hawthorne once said, “Words – so innocent and powerless as they are, as standing in a dictionary, how potent for good and evil they become in the hands of one who knows how to combine them.”

Rest assured, I am typing these words myself using the brain God gave me. Candidly, I have concerns about the homogeneity we seem to be developing around the world. The internet has connected us instantaneously to TikTok, Google, fashion, word-usage, and data sources, and this appears to be making us all look, talk, and think the same. 

Call me old-fashioned, but I prefer to think and write for myself based upon my faith, upbringing, education, professional training, and experience. God made me in His image, but I was made to be unique and one-of-a-kind. Yes, it takes more time and my vocabulary is not as expansive. But it is 100% me. I haven’t been split, subdivided, or cloned. Nor am I part of artificial intelligence. While there are exceptions to almost every rule or supposition, the passage of time is the best way to evaluate the public good that can potentially be attributed to stock splits and artificial intelligence.

Gulf County resident Walter L. Woodrick is a certified financial planner practitioner, and the author of two books. His website is WoodrickFinancial.com. Securities and advisory services are offered through LPL Financial, a registered investment advisor, Member FINRA/SIPC. The opinions voiced in this article are for general information only and not intended to provide specific advice or recommendations for any individual. 590831-1