Predicting the Two Wall Street Stocks with Notable Splits in 2025
Predicting the Two Wall Street Stocks with Notable Splits in 2025
In 2024, the stock market has been on a rollercoaster ride with record-breaking highs. The Dow Jones, S&P 500, and Nasdaq Composite have seen impressive gains, with the Nasdaq Composite leading the pack with a 31% increase this year. While artificial intelligence and political victories have undoubtedly contributed to Wall Street's rise, let's not forget the impact of stock-split euphoria.
The Power of Stock Splits
In layman's terms, a stock split is an event that alters both a company's share price and outstanding shares—both cosmetic adjustments that don't affect its market cap or operational performance. Two types of splits exist: reverse and forward.
Reverse stock splits boost a company's share price by reducing the outstanding shares, typically used by struggling businesses to meet exchange listing requirements. Conversely, forward stock splits lower the share price, making shares more accessible to retail investors. Enterprises that enact these splits are usually industry leaders in innovation.
2024 saw more than a dozen prominent companies undergo forward stock splits, many derived from the AI revolution, including Nvidia, Broadcom, and Super Micro Computer. This shift in strategy often leads to a significant stock price rise in the 12 months following the split announcement, making investors continually on the lookout for the next big split.
The Predicted Stock-Split Kings of 2025
Two companies seem poised to take the spotlight as Wall Street's next favorite stock-split investments:
Meta Platforms
Integral to the AI discourse, Meta Platforms (META)—operator of Facebook, WhatsApp, and Instagram, among others—has never split its shares. Despite its slight $620 share price, the momentum for a forward split is burgeoning.
Though Meta isn't solely AI-driven, advertising generates the majority of its $116.1 billion in sales for the first nine months in 2024. With its apps capturing a colossal 3.29 billion daily users and substantial ad-pricing power, Meta is positioning itself as a social platform behemoth. Its $70.9 billion in cash reserves enables strategic investments in technology like Nvidia GPUs, setting the company up to play a significant role in the metaverse's emergence.
Costco Wholesale
Warehouse club giant Costco Wholesale (COST) hasn't undergone a stock split in nearly 25 years—an oddity given its shares' price nearing $1,000. With retail investors barred from fractional share purchases, Costco's high share cost is increasingly becoming a hindrance.
The beauty of Costco's business model lies in its three pillars: consumer staples, price advantages, and membership revenue. This combination ensures sustainable cash flow, lures customers, and drives repeat business. With $1,000 shares potentially deterring new members, a stock split could rekindle the interest among retail investors.
Enrichment Data: 1. Meta Platforms: While there's no direct mention of a stock split, Meta's stock is expected to stay attractive due to its AI and metaverse prospects, potentially reaching $750 by 2025. * Costco Wholesale: Despite ongoing speculation, Costco's management has shown a preference for attracting long-term investors over short-term traders, making a split less likely in the near future. * Broadcom: After a 2024 stock split and robust growth prospects, Broadcom could potentially split again soon. * Casey's General Stores: Casey's General Stores is another potential candidate for a stock split in 2025 due to its rising share price.
In the context of the predicted stock-split kings of 2025, Meta Platforms, with its significant investments in Nvidia GPUs and growing influence in the metaverse, is expected to attract investors, potentially leading to a forward stock split. Furthermore, the high share cost of Costco Wholesale might deter retail investors, making a stock split an appealing strategy to make the company more accessible to a wider pool of investors.