These companies have a long history of stellar performance.
A resurgence in the popularity of stock splits has been in the spotlight in 2024 as a number of high-profile stocks have taken the plunge. Companies will typically go this route after years or even decades of strong operating and financial results have pushed the stock price beyond the reach of some investors. While a stock split doesn’t change anything about the underlying value of the business, it does make the stock more affordable for employees and everyday investors, a reason often given by companies as the primary motivation for the split.
Investors, however, should focus on the strong results that ultimately led to the stock split, as this is historically an indicator of a business firing on all cylinders, which is a great reason to own the stock.
Let’s take a look at two companies that still have significant upside ahead of them, according to some Wall Street analysts.
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Nvidia: Implied upside 59%
The first stock separated from the stock with inverted mounds is Nvidia (NVDA -0.36%). The chipmaker was already the gold standard for graphics processing units (GPUs) used by gamers and in data centers. However, the advent of generative artificial intelligence (AI) early last year pushed its business into overdrive.
The company has been referred to as a “picks and spades game”. The investment reference has its origins in a famous quote attributed to Mark Twain: “During a gold rush, it’s a good time to be in the pick and shovel business.” For the AI gold rush, Nvidia is supplying the picks and shovels.
The parallel processing capability of Nvidia’s GPUs was groundbreaking for rendering vivid images in video games. This allows them to perform a large amount of mathematical calculations at the same time. It turns out that the same functionality works just as well in AI processing.
Nvidia’s latest results show why most analysts on Wall Street are optimistic. For the first fiscal quarter of 2025 (ended April 28), Nvidia’s revenue rose 262% year over year to a record $26 billion, while earnings per share (EPS) rose 629% to 5.98 dollars. The company’s data center segment, which includes processors used for AI, has become the company’s biggest cash maker, as revenue of $22.6 billion rose 427%.
Nvidia recently completed its high-profile 10-for-1 stock split, and despite posting gains of more than 194% over the past year (as of this writing), Wall Street remains extremely bullish. Rosenblatt analyst Hans Mosesmann raised his price target to $200 while reiterating a buy rating on the stock. This represents potential gains for investors of 59% compared to Tuesday’s closing price.
Accelerating demand for AI-focused processors forms the bedrock of the analyst’s thesis, but he believes the secret sauce is Nvidia’s proprietary software paired with its best-in-class chips.
“We anticipate that this aspect of software will grow significantly over the next decade in terms of overall sales mix, with an increasing bias toward appreciation due to sustainability,” Mosesmann wrote. The analyst’s price target suggests Nvidia’s market cap will grow to nearly $5 trillion over the next year.
Despite the stock’s epic run over the past year, Wall Street is still extremely bullish on Nvidia. Of the 57 analysts who provided an opinion on the stock in May, 53 rated the stock a buy or strong buy, and NONE recommended sale.
Celsius Holdings: Implied upside of 75%
Another stock separated from the stocks with significant upside potential is Celsius Holdings (CELH -0.78%). The company’s focus on health-focused energy drinks has been a hit with consumers. It is the third-largest and fastest-growing energy drink brand, contributing 47% of all industry growth in the first quarter, overtaking biggest rivals Red Bull and Monster drink.
Celsius holds an enviable position in an industry that continues to grow. The energy drink category has continued to generate strong growth over the past three years, even as the broader beverage category has shrunk — and Celsius is leading the charge.
In the first quarter, revenue rose 37% year-over-year to $356 million, while diluted EPS rose 108%. It’s always encouraging when profits grow faster than revenue, as it illustrates that a company has reached the scale needed to cut more revenue on the bottom line.
The company’s sales more than doubled last year as it leaned on its partnership with PepsiCo, which resulted in the beverage and food giant making a $550 million investment in Celsius, taking an 8.5% stake in the company and signing a long-term distribution deal. However, this is a double-edged sword, as Celsius now faces difficult complications after such a banner year.
Celsius Holdings carried out a 3-for-1 stock split at the end of last year, thanks to its record of strong performance. However, fears about slowing growth have weighed on the stock, which has fallen 42% over the past month, but some on Wall Street are undaunted. Jefferies analyst Kaumil Gajrawala has a $98 price target and a buy rating on the stock. This represents potential gains for investors of 75% compared to Tuesday’s closing price. The analyst noted that the drawdown is “normal in the second year [a] national distribution” and advises investors to ignore “short-term noise”.
The analyst is not the only Bulgarian against Celsius. Of the 16 analysts who provided an opinion on the stock in May, 14 rated the stock a buy or strong buy, and NONE recommended sale.