Nvidia Corp's recent 10-for-1 stock split has prompted Goldman Sachs to caution investors about expecting a sustained rally. Despite the company's impressive performance, with shares surging nearly 27% in May and another 10% this month, Goldman Sachs emphasizes that stock splits generally offer limited long-term benefits.

Goldman Sachs reviewed 45 Russell 1000 stock splits since 2019, finding that there was typically a 4% rise in shares the week after the announcement, but no apparent impact around the effective date. David Kostin, head of U.S. equity strategy at Goldman, noted that liquidity showed little change post-split. Additionally, stock splits have not significantly boosted retail trading activity.

However, Nvidia's previous split in 2021 and Amazon.com Inc's 2022 split were exceptions, showing increased retail trading. This has led some experts to suggest that Nvidia's split could position the company for inclusion in the Dow, potentially replacing Intel Corp.

Ben Laidler, global markets strategist at eToro, believes that Nvidia's split could pave the way for its inclusion in the Dow index, a move that would further solidify its standing as a major player in the technology sector. On the other hand, Dennis Dick, a market structure analyst at Triple D Trading, anticipates some buyer exhaustion post-split, noting a typical "hangover effect" after such runs.

Nvidia's valuation has experienced a remarkable surge of 153% year-to-date, fueled by the AI frenzy backed by U.S. Big Tech companies, including Microsoft Corp, Meta Platforms Inc, and Alphabet Inc. Together with Amazon, these companies account for about 60% of the S&P 500's 12% return this year, with Nvidia contributing a third of this gain.

While the stock split and potential Dow inclusion could offer short-term benefits to Nvidia, it remains uncertain whether the company will experience a sustained rally after the split. Market analysts caution that stock splits generally have limited long-term impact, and previous examples show mixed results.

At the time of writing, Nvidia's shares were trading lower by 0.85% at $120.75. Investors will be closely watching the company's performance in the coming weeks to assess the effects of the stock split and its potential for long-term growth.