Will Microsoft and Meta Platforms Follow Suit with Stock Splits in 2025?

As high-quality companies generate significant value, their stock prices often reach lofty heights, making it challenging for smaller investors to participate. This financial barrier typically favors institutional investors and large funds. However, stock splits can make shares more attainable, reducing the price while increasing the number of shares available. Although stock splits do not alter a company’s intrinsic value, they can enhance accessibility for retail investors.

Stock Split Trend in 2024

Several prominent companies implemented stock splits this year:

• Nvidia executed a 10-for-1 stock split on June 10, lowering its share price from $1,200 to $120.
• Chipotle completed a 50-for-1 stock split on June 26, decreasing its price per share from $3,283 to $66.
• Broadcom performed a 10-for-1 stock split on July 12, adjusting its share price from $1,700 to $170.

With the new year approaching, analysts are speculating about companies that may announce stock splits in 2025. Predictions suggest Microsoft (NASDAQ: MSFT) and Meta Platforms (NASDAQ: META) could be on this upcoming list, as they hold the highest per-share prices among technology companies valued at over $1 trillion.

1. Microsoft: A Potential 3-for-1 Split on the Horizon

Since going public in 1986, Microsoft has completed nine stock splits. Over these 38 years, the company has generated an impressive $3 trillion in value for its investors. Interestingly, if Microsoft had never split its stock, it would currently be trading at approximately $119,500.

Last splitting event took place in 2003. Microsoft’s current stock price hovers around $415, leading many to believe it’s time for another split, particularly with the rising value from its investments in artificial intelligence (AI).

As a major backer of OpenAI, which developed ChatGPT, Microsoft has integrated this technology into its Copilot virtual assistant, available in products like Windows, Bing, and Edge. Users can also enhance their Office 365 experience (Word, Excel, PowerPoint) by subscribing to access Copilot.

Copilot has the potential to streamline workflows by generating text and visual content promptly. With over 400 million Office 365 licenses, Microsoft faces significant growth opportunities with its Copilot services.

Another driver of growth is Microsoft Azure, a leading global cloud services provider that attracts developers with advanced computing infrastructure. In its recent fiscal 2025 first quarter, Azure revenue surged by 33% compared to the previous year, with AI services contributing 12 percentage points of that growth—up from 8 points just three months prior.

A potential 3-for-1 split would bring Microsoft’s share price down to $138, making it more accessible to smaller investors and aligning its price range with other tech giants, including Nvidia, Amazon, Alphabet, and Apple, which trade between $100 and $250.

2. Meta Platforms: Could a 10-for-1 Split Be Next?

Meta Platforms has never executed a stock split since its public debut in 2012 at $38 per share. The stock has skyrocketed to $554, currently the highest among technology stocks valued at over $1 trillion.

Meta, which owns Facebook, Instagram, and WhatsApp, engages around 3.3 billion users daily. Its primary revenue source is advertising, so increased user engagement directly boosts profits. The company has leveraged AI to enhance engagement by personalizing content feeds, resulting in an 8% rise in Facebook user activity this year and a 6% increase on Instagram.

Meta has also introduced new features like its AI-powered assistant, Meta AI, which attracted 500 million monthly active users as of Q3 2024. This feature can generate content and assist in group chats, making it popular across its platforms.

The company plans to invest up to $40 billion in data center infrastructure this year, which will support the launch of Llama 4, their most powerful large language model, set for 2025. CEO Mark Zuckerberg touts its potential to dominate the industry.

Meta’s stock currently trades at a forward P/E ratio of 21.9, indicating it would need a 71% jump to align with its 10-year average of 37.5, suggesting a future price of approximately $947. Given its escalating stock price, a 10-for-1 split could likely be on the table if they approach the $1,000 mark next year.

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John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is on The Motley Fool’s board. Randi Zuckerberg, sister of Meta’s CEO, also serves on the board. The Motley Fool endorses Alphabet, Amazon, Apple, Chipotle, Meta, Microsoft, and Nvidia, and has various other positions and recommendations.

The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.