Meta Platforms Inc.’s recent record-breaking, 20-day rally propelled the share price to a level where investors may start calling on the company to split its stock for the first time since going public in 2013.
That winning streak drove the social media company’s shares to a record close of $736.67 on Feb. 14 and a gain of more than 25% for the year by the end of last week. The Facebook owner is the top performer in 2025 among the Magnificent Seven, even after snapping that rally with two days of declines.
Meta is the only member of the tech megacap cohort to never carry out a split, which companies sometimes do when strong run-ups in their stock push the price so high that it can act as a deterrent to smaller retail investors.
A purely mathematical action, a split changes nothing about the underlying fundamentals of a company, but does lower the price per share. In 2024, companies such as Nvidia Corp. and Broadcom Inc. enacted splits following massive rallies fueled by artificial-intelligence advances, as a way of pulling their share prices back to less eye-watering levels.
“They want to make their stocks more accessible to a broader audience. That’s a good reason,” said Francisco Bido, senior vice president and portfolio manager at F/M Investments.
It can also be a sign of confidence from a company, because it signals that they see potential for further gains and so aren’t worried about cosmetically lowering the price.
“They’re confident about their future earnings and growth opportunities,” Bido said. “Rarely do you see a company that’s not doing very well go ahead and split.”
There’s at least one other big tech name flying high enough to contemplate the move. Netflix Inc. has gained more than 17% this year through Wednesday’s close, eclipsing the key psychological threshold of $1,000 a share. It’s a level that’s prompted others to divide their stock and hand investors — and employees — a lower sticker price. Netflix has done it before, with a seven-for-one split in 2015.
The potential benefits extend beyond enticing more retail investors. Nvidia’s stock split in May 2023 likely helped its eligibility for the Dow Jones Industrial Average, which it joined in November.
The practice has enjoyed a resurgence since going out of vogue due to the advent of fractional shares. Last year, 17 companies in the S&P 500 Index split their shares, the most since 2013, according to data from Bank of America analysts led by Jared Woodard. Technology companies have also recently embraced the practice — seven Nasdaq 100 companies took the step in 2024 after none a year earlier.
The move can also spur bullish sentiment. The average return for stocks one year after a split tops 25%, against 12% for the broader market, according to BofA’s analysis. The showing was even stronger in 2024, with the average stock up 17% in the subsequent six months.
Five of the Magnificent Seven cohort have enacted a split since 2022 — Nvidia, Alphabet Inc., Amazon.com Inc., Tesla Inc. and Apple Inc. The last time Microsoft Corp. did it was in 2003.
There are about 40 companies in the S&P 500 that boast a stock price of more than $500, putting them in the frame to contemplate the step. Aside from Meta and Netflix, that includes ServiceNow Inc., KLA Corp., Tyler Technologies Inc., Intuit Inc. and Synopsys Inc., among others.
Tech Chart of the Day
Carvana shares dropped in premarket trading on Thursday after the used-car retailer reported lower gross profit per vehicle and shrinking wholesale volumes for the fourth quarter. The stock has rallied more than 400% over the last 12 months.
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