This will be the next stock split in the artificial intelligence (AI) space

Stock splits have been a big topic this year. Top companies across industries have taken these actions to reduce their high stock prices. A stock split lowers the price per share of a company by issuing new shares to current holders. And many of these stock split announcements have come from players in the artificial intelligence (AI) space – from NVIDIA To Broadcom.

This is because the stocks of companies in this growth sector have risen sharply, with Nvidia and Broadcom shares up more than 300% and 200%, respectively, over the past three years.

And today, with AI stock prices still reaching several hundred dollars, the stock split wave is not over yet. In fact, one stock seems to be an excellent candidate thanks to its solid growth over the past few years, its top share price performance, and its long-term prospects.

The price is over 500 dollars per share

Which company am I talking about? My prediction is Meta-platforms (NASDAQ:META) will be the next AI stock to split. The stock is up nearly 50% this year and trades for more than $500 per share. Meta is a member of the “Magnificent Seven,” a group of top-performing technology stocks that led market gains over the past year — and it's the only one that has never undergone a stock split.

So let's look at why a stock split would be a good idea for meta. It is true that these actions do not act as catalysts for stock movements because they do not change anything fundamental about a company – investors will not buy shares simply because A stock split was performed. Stock splits do not affect valuation, so a stock does not become cheaper after the operation, even if its price per share is lower.

But in the long run, a split can still prove to be very positive for a company for two reasons. First, by lowering the share price, a split opens up the investment opportunity to a wider range of investors. Many no longer have to resort to fractional shares – which may not even be available through their broker – to invest in the stock.

Second, a stock split signals to the investing community that the company is optimistic about the future. The idea is that the new lower price may cause the stock to soar again over time.

One of the cheapest shares of the Magnificent Seven

Meta is still one of the cheapest of the Magnificent Seven, the second cheapest after alphabet when considering future earnings estimates.

But at its current share price, it may be out of reach for some investors. By lowering the price, Meta could broaden its potential investor base. Now is a good time for a split because investors are interested in companies that are heavily involved in AI, an area with explosive future potential.

The story continues

The AI ​​market is expected to grow from $200 billion today to over $1 trillion by the end of the decade. Meta wants to be at the forefront and is investing in AI to make that happen. The company has made the technology its biggest investment area this year and expects to have 600,000 H100-equivalent GPUs on board by the end of the year.

You probably know Meta best for its social media apps, from Facebook to Instagram, and those top platforms generate billions in advertising revenue. Meta wants to improve those apps using AI, which should bring in more and more ad revenue over time—and the company's aggressive AI investments could also expand its product and service offerings.

Meta's solid track record of growing earnings means the company has the funds to execute on its plan. Earlier this year, the company paid its first dividend and said it has the financial strength to reward shareholders and fund growth.

So the timing seems right for a stock split for this company that has made AI its priority, and that's why I expect Meta to be next on the AI ​​stock split list.

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Randi Zuckerberg, former director of market development and spokeswoman for Facebook and sister of Mark Zuckerberg, CEO of Meta Platforms, is a member of The Motley Fool's board of directors. John Mackey, former CEO of Whole Foods Market, a subsidiary of Amazon, is a member of The Motley Fool's board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Adria Cimino has positions in Amazon and Tesla. The Motley Fool has positions in and recommends Alphabet, Amazon, Apple, Meta Platforms, Microsoft, Nvidia, and Tesla. The Motley Fool recommends Broadcom and recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.

Prediction: This will be the next stock split in the artificial intelligence (AI) space. Originally published by The Motley Fool