Stock splits have regained popularity in recent years. Factors including the adoption of artificial intelligence, rising corporate profits, and expectations of Federal Reserve interest rate cuts have pushed stock prices higher, renewing interest in splits. Companies typically pursue splits after periods of rapid growth that elevate share prices beyond the reach of everyday investors.
Investors are drawn to stock splits for another reason. The strong business performance that prompts a split often continues. According to data from Bank of America analyst Jared Woodard, companies announcing splits have returned an average of 25% in the following year, more than double the S&P 500's average return of 12%.
While many stocks could qualify, Meta Platforms is predicted to be the most prominent stock split of 2026.
Meta Platforms operates several major social media platforms, including Facebook, Instagram, WhatsApp, Messenger, and Threads. These services collectively reach over 3.5 billion users daily, with new users joining each quarter. This extensive reach is highly valued by advertisers.
The company's vast collection of user data is considered a key asset. This data helps Meta deliver more relevant content and informs its digital advertising strategy. User posts, photos, messages, videos, and reactions provide insights that assist in connecting audiences with targeted ads.
This data advantage and unparalleled reach have made Meta the world's second-largest digital advertiser, behind only Alphabet's Google. Strong financial results have followed. In the third quarter, Meta reported revenue of $51.2 billion, a 26% year-over-year increase. Adjusted earnings per share rose to $7.25, up 20%.
Beyond its growing audience, other factors support growth. Global ad spending is projected to rise by roughly 5% and exceed $1 trillion for the first time in 2026, according to ad agency Dentsu. Social media advertising is forecast to be one of the fastest-growing segments, with an expected 16% growth in the coming year.
Meta has also advanced in artificial intelligence. The company used its data resources to develop Llama, a leading open-source AI. This suite of large language models provides a competitive edge.
Meta states its AI is "delivering higher quality and more relevant content." User engagement increased in the third quarter, with time spent on Facebook up 5% and on Threads up 10%. Higher engagement correlates with rising ad revenue, as seen in Meta's average price per ad, which increased 10%.
Meta has been a market-beating stock. Over the past decade, revenue grew 852%, driving adjusted net income up 959%. These results have fueled a 535% increase in the stock price. Since its 2012 IPO at $38, the stock has risen 1,550%. Meta remains the only "Magnificent Seven" stock that has never conducted a split.
The company has not made an official announcement. However, with a current share price above $600, Meta appears to be a prime candidate for a stock split, especially as many peers have already done so.
Investors are advised not to buy Meta stock solely on the possibility of a split. Other reasons include valuation. Meta currently trades at less than 28 times earnings, the lowest among its Magnificent Seven peers and below the S&P 500 average multiple of 31.
Its consistent growth record, industry dominance, and attractive valuation present a case for investment ahead of a widely anticipated stock split.
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