Meta: The Next AI Stock to Split?

Meta Platforms (META) has been on a tear in recent months, with its stock price soaring by 76% in the past year. The social media giant's aggressive expansion into artificial intelligence (AI) has investors buzzing about its potential. But with its share price now over $600, some may find it too pricey. Could a stock split be in the cards for Meta? Let's explore the possibilities.

AI Investments Driving Growth

Meta has been pouring resources into AI, with CEO Mark Zuckerberg expressing his desire to create AI tools for all users. The company has developed its own large language model (LLM) and is now training the latest version, Llama 4. Meta's AI assistant, Meta AI, has seen fast adoption, and its AI-driven engagement strategies are keeping users on its platforms longer, driving more ad revenue.

Meta's AI investments could lead to new products and services, further driving growth. Additionally, its work in LLMs and making them available to the developer community could position the company as an AI leader. With such a promising future, a stock split could make Meta's shares more accessible to a wider range of investors.

Why a Stock Split Could Be Coming

Stock splits don't change a company's fundamentals, but they can make shares more accessible to smaller investors. With Meta's share price now over $600, some investors may be hesitant to buy in. A stock split could lower the per-share price, making it more affordable for these investors.

Moreover, a stock split could be seen as a sign of confidence from management, indicating that they believe the stock has what it takes to rise from its new, lower price point. With Meta's AI investments poised to drive future growth, a stock split could be a logical next step.



Potential Benefits and Drawbacks

A stock split could bring several benefits to Meta and its investors, such as increased accessibility and potential demand. However, it's essential to remember that a stock split doesn't change the company's fundamentals. It's still the same business with the same earnings and cash flows, just with more shares outstanding.

Additionally, a stock split could lead to dilution, as the number of shares increases. However, if Meta's AI investments continue to drive growth, the increased share count may not be an issue.

Conclusion

Meta Platforms' aggressive expansion into AI has investors excited about its potential. With its share price now over $600, a stock split could be in the cards to make its shares more accessible to a wider range of investors. While a stock split doesn't change the company's fundamentals, it could be a sign of confidence in Meta's future growth prospects. As always, investors should do their due diligence and consider their risk tolerance before making any investment decisions.