Surprise! Billionaire Money Managers Are Selling Shares of Nvidia and Piling Into 2 Off-the-Radar Stock-Split Stocks.

Although artificial intelligence (AI) has been an exceptionally popular market trend that has helped power the growth-fueled Nasdaq Composite and benchmark S&P 500 to new heights, the enthusiasm shown by investors for stocks conducting splits has played an equally vital role in lifting select equities higher in 2024.

A stock split allows a publicly traded company to adjust its share price and outstanding share count by the same factor. Splits are purely a cosmetic tool in the sense that they have no impact on a company's underlying operations or its market cap. Rather, they're designed to increase or decrease a company's share price, often with a very clear purpose.

A reverse split aims to increase a company's share price, usually with the goal of maintaining its listing on a major stock exchange. Since this type of split is often conducted by struggling businesses, it's one that investors tend to shy away from.

On the other hand, forward stock splits reduce a company's share price to make it more nominally affordable to retail investors and/or employees who can't purchase fractional shares. This type of split is typically completed by top-notch businesses that are out-innovating and out-executing their peers. Unsurprisingly, this is where a majority of investors focus their attention.

Since 2024 began, a little over a dozen prominent businesses have announced or completed a stock split; only one was a reverse split.

Billionaire investors have certainly taken note of the outperformance of the Class of 2024 stock-split stocks. However, their outlook for this group is mixed.

While most investors have been fixated on brand-name stock-split stocks, such as Nvidia (NASDAQ: NVDA), billionaire money managers have been quietly sending shares of Nvidia to the chopping block in favor of two off-the-radar stock-split stocks.

Wall Street's smartest and richest asset managers are passing on Nvidia

Though it was Walmart that officially kicked off stock-split euphoria early in 2024, there hasn't been a more-anticipated split this year than Nvidia's. The AI juggernaut completed its historic 10-for-1 forward split following the close of trading on June 7.

Even though Nvidia's AI graphics processing units (GPUs) are dominating in AI-accelerated data centers, this hasn't halted a nine-month exodus by billionaire asset managers from the company's stock. Based on form 13F filings with the Securities and Exchange Commission for the June-ended quarter, seven billionaires were sellers, including (total shares sold in parenthesis):