To the surprise of many traders and investors, myself included, the stock market has been on an incredible run since march of this year. Recently, the two technology titans apple and tesla - have been stirring up a lot of excitement because both just closed at new all-time highs, and on top of that, both companies have an upcoming stock split on august 31st. What's going on moon gang, i hope you're having a great day. My name is matt and in this video i'll quickly be covering what a stock split is and why a company would have one then i'll, be diving into the specifics surrounding both apple and tesla and, at the end, i'll be sharing my personal thoughts on.

If this is a buying opportunity or not, if you're interested in this type of stock market related content join the moon gang by hitting the subscribe button and don't forget to turn on your notifications, so you don't miss any of the timely updates. Alrighty, then, now that we got that out of the way let's get started, so what is a stock split? A stock split increases the total number of shares in a company. This has the effect of decreasing the price of an individual share, but it has no impact on the total market. Capitalization of the company put it this way.

Imagine you had a five dollar bill now pretend you exchanged that five dollar bill for five one dollar bills in the end, you have more dollar bills, but the value hasn't changed at all. This is the same with stock splits. You end up with more shares at a lower cost and the overall value of the position isn't changed. So if a stock split doesn't fundamentally change anything, why would a company choose to go through one? The answer is trader psychology.

You see many traders and investors don't focus on the market cap of a company. Instead, they look at the price of an individual share. So if a stock is magically dropped from 500 to 100 because of a stock split, it appears to be cheaper, even though it's not as a quick side note, this psychological anomaly has started to have less of an impact as more brokerages are offering fractional shares, because They essentially simulate a stock split apple trades under the stock symbol, aapl and it recently closed just below 500, which marks an all-time high since the start of this year, the stock is up 68. I know this might not seem like an incredible amount, but this run from the low in march to the most recent close was a gain of 134 percent.

This is equivalent to more than one trillion dollars. That's trillion with a t fun fact of the day. Apple's market cap currently sits just over two trillion dollars. It took the company 42 years to hit 1 trillion and then just 2 years to hit 2 trillion.

As things currently stand, analysts are predicting the company to hit 3 trillion between the years of 2022 and 2023 apple announced a 4-1 stock split on july 30 and since then, the stock is up 29 at the current price. This stock split means that for every share you own as of august 31st, you'll own four times as many and the price will be in the ballpark of 124 dollars. The story is a little bit different for tesla tesla trades under the ticker tsla and since the start of this year the stock is up an incredible 385 percent. This all-time high, just above two thousand dollars, puts the company's value at 380 billion.

Yes, this is small compared to apple, but to put it in perspective, this makes tesla the most valuable car company and even more valuable than all of walmart. Tesla announced a 5 for 1 stock split on august 11th and since then the stock is up a noteworthy 49 percent. At this current level on august 31st, every share will be transformed into five shares. They each have a value of 410 august 31st will mark tesla's.

First, stock split and apple's fifth apple previously went through a 7 for 1 split in 2014 and a 2 for 1 split in 2005, 2000 and 1987. in terms of historic performance. The stock split in the year 2000 was the only one that the market didn't react. Kindly to but take that with a grain of salt, because it was also the tech bubble.

In my opinion, your decision to buy or not buy both apple and tesla shouldn't be impacted by the stock split with that being said, i'm bullish on both of these companies for two key reasons. The first is that i'm predicting both of them benefit from the momentary hype and excitement created by the stock split. The second is their fundamentals. From 2015.

Until now, apple's total revenues have grown from 234 billion to 274 billion, and their gross profit has gone from 93 billion to 104 billion. When you look at their bottom line for the same time period, their net income has gone from 53 billion to 58 billion. Tesla has also been showing some impressive growth from 2015. Until now, their total revenues have gone from 4 billion to 26 billion, and their gross profit has gone from 900 million to 5 billion tesla's net income has also been showing a similar trend in 2015.

It lost just under 900 million dollars and now it's profitable at 368 million. These two income statements do a good job at illustrating how apple and tesla are in very different stages of the business growth cycle. Apple is much more established and reliable and tesla is growing at a rapid rate and just became profitable, depending on your risk, tolerance and trading goals. One stock might be better for you than the other if you're interested in generating a steady cash flow.

You should know that apple offers a dividend. This means that you're paid quarterly to simply own the stock. This dividend safety score of 99 is the max score and it means that their dividend payments aren't going anywhere anytime soon. The dividend payment size is also growing at an acceptable rate of six percent.

Overall apple is widely considered to be one of the safest tech companies. On the other hand, tesla is much more volatile and has much more risk, but that comes with a much higher reward. Whatever you decide to do, please don't forget that a stock split does not designate a better investment opportunity. I'm personally bullish on both companies and i'm beyond excited for august 31st.

Make sure you buckle up because it's going to be a wild ride. If you made it this far in the video, i truly appreciate your support. If you're interested in me making an update video after the stock split, let me know in a comment below also feel free to leave any suggestions or recommendations, and if you enjoyed the video, let me know by hitting the like button. If you want to join the moon gang subscribe to the channel and don't forget to turn on your notifications, thanks for watching and until next time best of luck in the markets, you.