Nvidia stock (NVDA) began trading Monday on a new 10-for-1 split basis, revising the shares' Friday closing price of $1,208.88 to $120.88. The stock closed up nearly 1% in its first day following the split.

The split means that owners of Nvidia common stock held as of the close of market on Thursday received 10 shares for each one share they held. For example, if a shareholder owned four shares of Nvidia as of Thursday, they now own 40 shares post-split.

Stock splits make owning shares of a stock more affordable by lowering the price of individual shares without diluting the value of existing shareholders' total holdings.

"The stock split is going to make Nvidia a lot more reachable for a lot of these retail traders," Option Research & Technology Services' Matt Amberson told Yahoo Finance last Thursday. "Now, you rarely see a stock over $1,000 with a 50% implied volatility, so the prices of the options are extraordinarily high, so options traders are really looking forward to the split."

Nvidia's split comes after the company's total market valuation briefly eclipsed $3 trillion on Wednesday, pushing the chip firm past Apple to become the second-most-valuable publicly traded US company.

Shares of Nvidia have skyrocketed thanks to the explosion in interest in generative AI that kicked off when OpenAI debuted its ChatGPT software in late 2022. Since then, hyperscalers like Amazon (AMZN), Google (GOOG, GOOGL), and Microsoft (MSFT) have been battling to get their hands on Nvidia's hardware to power their own generative AI platforms.

That sent Nvidia's revenue through the roof. In the first quarter, Nvidia reported adjusted earnings per share of $6.12 on revenue of $26 billion, jumps of 461% and 262%, respectively, from the same period a year ago.

Nvidia's Data Center revenue in the most recent quarter increased 427% year over year to $22.6 billion, accounting for 86% of the company's total revenue for the quarter. Nvidia's gaming segment, which was previously its most important business, saw revenue of $2.6 billion.

And Nvidia continues to develop new hardware to keep customers coming back for more. On June 3, CEO Jensen Huang announced an upgraded version of its Blackwell AI platform, called Blackwell Ultra, is coming in 2025 as well as an entirely new platform called Rubin set for 2026. And in 2027, the company will release an Ultra version of the Rubin hardware.

Stock splits are viewed by investors as a sign of strength, and consequently, companies that split their stock typically outperform the S&P 500 in the year following their announcement.