Nvidia shares continue to dip: Stock split on the horizon?

Shares of Nvidia (NVDA) traded lower early Monday morning following the company's worst one-day loss in ten months. Last Friday's drop represented a wipeout of $250 billion from the stock, spooking the broader market. A note from BTIG claims that consolidation in AI trade has been overdue.

Yahoo Finance Anchors Brad Smith and Seana Smith break down the latest developments for Nvidia and discuss the possibility of a stock split.

For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.

Editor's note: This article was written by Nicholas Jacobino

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SEANA SMITH: All right will to take a look at another Mag Seven name. And that is NVIDIA. Shares pulling back further in the pre-market. You can see it down just about 6/10 of a percent. It's been a wild couple of hours here. It had been trading higher this morning.

Now, the chip maker saw its biggest one day loss in about 10 months on Friday. And that was enough to spook the broader market. We saw the pressure that then put on the S&P, and, obviously, the NASDAQ, as we closed out the trading week last week.

And putting this in perspective, the drop that we saw on Friday at one point, when it had been off just about 6% in intraday trading, $250 billion have been wiped off the stock in just about three hours. So that really puts the drop in perspective here for investors.

BTIG out with the note saying that the consolidation in the AI trade has been overdue for a while now. Friday's key reversal day could signal some more of that unwind that could be ahead.

BRAD SMITH: Yeah. I just think back to some of our recent history in our conversation with Brian Belski, just a moment ago, talking about how he was looking at his own positioning within NVIDIA trading just a little bit here to start the year.

And it's perhaps some of the behavior that's to be expected at this juncture. You've got NVIDIA sitting at all-time highs right now, essentially, over the past couple trading sessions. A little bit of profit taking so taking some chips off the table. Perhaps, some rotation into financials, into health care, some of the other hot sectors, like Brian was talking about, and some other strategists have put in front of us as well and made their cases for.

But now, it's a larger question of, does NVIDIA see an opportunity even for a stock split in the near future? What would that do for the retail investor out there? Does that make it more attractive than to pile more into the NVIDIA trade, even though we've seen this massive run up at this point? So making it more affordable on a share price perspective as an entry point. But still, I think, that is one area, where if it was to hit $1,000, where we might hear a little bit more talk about that potentially.

SEANA SMITH: Yeah. We have certainly seen that talk really start to escalate here, at least, last week, just in terms of what that would do and the potential for that to actually happen.