The Most Anticipated Stock Split of 2025 May Be Announced Later Today

Globe and Mail

2 days ago

Key Points
Next to artificial intelligence (AI), excitement surrounding stock splits has been a dominant trend on Wall Street.
Three prominent non-tech companies have announced and completed forward splits in 2025.
Retail investors own more than 27% of the outstanding shares of what could become Wall Street's blockbuster stock-split stock of 2025.
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For much of the past three years, artificial intelligence (AI) has been the hottest thing since sliced bread on Wall Street. But it's not the only trend investors have gravitated to. Euphoria surrounding stock splits in highly influential businesses has played a key second fiddle to AI.
A stock split is a tool publicly traded companies have at their disposal to cosmetically adjust their share price and outstanding share count by the same factor. These adjustments are considered cosmetic in the sense that they don't alter a company's market cap or in any way effect its underlying operating performance.
Though stock splits can increase or decrease a company's share price, investors perceive these actions very differently. Reverse splits, which increase a company's share price, are often avoided by investors since they're typically conducted from a position of operating weakness.
Meanwhile, forward splits, which reduce a company's share price to make it more nominally affordable for everyday investors who can't buy fractional shares, are adored. This type of split is associated with businesses that are out-innovating and out-executing their competition.
Additionally, public companies completing forward splits have a knack for outperforming Wall Street's benchmark stock indexes in the 12 months following their initial split announcement. This is why investors are always on the lookout for the next blockbuster stock-split stock.
Although there's no guarantee of which premier business will take the plunge next, the most-anticipated potential stock split of 2025 may be announced later today by none other than social media colossus Meta Platforms (NASDAQ: META).
2025 is waiting on its first true blockbuster stock split announcement
Last year, more than a dozen high-profile companies announced a split -- only one of which was of the reverse variety. Quite a few of these forward splits traced back to the tech sector, and more specifically AI stocks.
Through nearly seven months of 2025, only three prominent businesses have announced and completed a stock split; and none are from the tech space.
Though O'Reilly Automotive (NASDAQ: ORLY) wasn't the first to complete a split this year, it was the first notable public company to declare a split (15-for-1). In addition to the company benefiting from Americans hanging onto their vehicles for a longer period of time, O'Reilly has steadily repurchased shares of its stock since January 2011. Over the last 14 years and change, it's bought back roughly $26.6 billion worth of its common stock and retired almost 60% of its outstanding shares. This is having a decisively positive impact on earnings per share.
Automated electronic broker Interactive Brokers Group (NASDAQ: IBKR) announced its first-ever forward split (4-for-1) in mid-April, which was completed two months later. All facets of Interactive Brokers' key performance indicators are rocketing higher, with customer accounts up 32% year-over-year, as of the end of June, and daily average revenue trades soaring 49% from the prior-year period. Its investments in technology and automation are paying dividends.
Finally, wholesale industrial and construction supplies company Fastenal (NASDAQ: FAST) was the last of 2025's prominent stock-split announcements (2-for-1), but the first to actually complete its split. This marked the ninth time Fastenal has split since going public in 1987, which is a reflection of the company becoming more ingrained in industrial supply chains. Everything from internet-connected vending machines to inventory bin technology is helping Fastenal better understand its clients supply chain needs.
While O'Reilly Automotive, Interactive Brokers Group, and Fastenal are amazing companies, they're not Wall Street blockbusters. If Meta Platforms was to announce its first-ever split when reporting its second-quarter operating results after the closing bell on July 30, it would be the undisputed star among 2025's stock-split stocks.
Facebook parent Meta appears primed for a stock split
To be clear, there's more to picking out Wall Street's next stock-split stock than just finding a public company with a high share price. Not all companies are interested in splitting their stock. Additionally, if retail investor ownership is minimal, there's not much of an incentive for a company's board to approve a split.
Meta finds itself in the sweet spot where a stock split would make sense. Its board hasn't offered any opposition to the idea of a stock split, and more than 27% of its outstanding shares are held by retail investors. With Meta's share price consistently above $700 in recent weeks, the catalyst to make its stock more affordable for everyday investors is absolutely present.
More importantly, the building blocks are in place for Meta stock to head even higher.
Before delving into its AI ambitions, don't overlook the important role its social media platforms continue to play. Collectively, Facebook, Instagram, WhatsApp, Threads, and Facebook Messenger helped to lure 3.43 billion people, on average, to its family of apps daily in the month of March. No other social media company comes particularly close to this figure, which allows Meta to charge a healthy premium for ad placements.
To build on this point, ad-driven businesses are typically well-positioned for long-term success. Periods of economic expansion last substantially longer than recessions, which bodes well for ad-based operating models over the long run. Meta has pretty consistently generated 98% of its net sales from advertising.
However, the company's future is very much dependent on the success of artificial intelligence. CEO Mark Zuckerberg is spending aggressively to build out his company's AI data centers. Some of this technology is already being incorporated into Meta's platforms, with generative AI solutions becoming available to businesses advertising on its social sites. Other aspects of AI will come into play years down the road, with Zuckerberg's company still aiming to be a critical on-ramp to the metaverse.
Meta's cash-rich balance sheet and cash generation also suggest its stock isn't done heading higher. With more than $70 billion in cash, cash equivalents, and marketable securities available, as of the end of March, and the company generating $24 billion in net cash from operations in the first three months of 2025, there's more than enough capital to direct to innovation, share buybacks, and dividends.
The table is set for Meta Platforms to become Wall Street's most-anticipated stock-split stock of 2025. We'll know shortly if the company's board agrees.
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Sean Williams has positions in Meta Platforms. The Motley Fool has positions in and recommends Interactive Brokers Group and Meta Platforms. The Motley Fool recommends the following options: long January 2027 $175 calls on Interactive Brokers Group and short January 2027 $185 calls on Interactive Brokers Group. The Motley Fool has a disclosure policy.