Meta Platforms: A Split Decision Driven by AI and Investor Demand

Meta Platforms (NASDAQ: META) is approaching a pivotal moment. With its stock price nearing $700—a level where peers like Apple and Alphabet have historically split their shares—the social media giant is under pressure to make its shares more accessible to retail investors. But this isn't just about affordability. Meta's AI-driven growth, undervalued relative to its peers, and a retail ownership stake of 28%—unusually high for a tech titan—suggest the company is primed for a stock split that could supercharge its appeal. Here's why investors should act now.

The Split's Timing and Valuation Case

Meta's current valuation—29x trailing earnings and 20x forward earnings—remains reasonable for a company growing at 19% annually in revenue (Q3 2024) and 37% in EPS. Yet its $700+ share price risks alienating retail investors, who already hold nearly a third of its float. A stock split would lower the per-share price, likely boosting liquidity and reducing volatility.

Peer splits have historically followed a pattern: Apple split at $500 in 2020, Alphabet at $2,000 in 2022. Meta is now at the lower end of this threshold, and with its AI investments and metaverse ambitions, its trajectory suggests a split is inevitable.

Retail Investors Are the Catalyst

Retail ownership at 27–28% is staggering for a company of Meta's scale. By comparison, Alphabet and Microsoft each have <10% retail ownership. A split would likely draw even more retail interest, as seen with Tesla's 2020 split, which triggered a 120% post-split rally. Meta's 2025 Q1 earnings, which grew 35% in net income to $16.6 billion, underscore its capacity to sustain this momentum.

A split would also signal confidence in Meta's AI roadmap. The company's Llama series, now powering its ad targeting and metaverse platforms, is already driving revenue. In Q4 2024, AI-enabled ad sales grew 22%, outpacing traditional ads.

AI: The Undervalued Growth Engine

Meta's AI investments are often overlooked in its valuation. The $16 billion it spent in 2024 on AI and metaverse development—30% of its cash reserves—is a bet on becoming the go-to platform for enterprise AI tools and consumer metaverse experiences. Competitors like Amazon and Google are racing to catch up, but Meta's scale and user data give it a leg up.

Analysts estimate AI could add $20 billion to Meta's ad revenue by 2026, yet its valuation still lags peers. At $1 trillion, it's half the size of Alphabet and behind Microsoft. A stock split would make this undervaluation more apparent to retail investors, potentially igniting a buying frenzy.

Risks and Why They're Manageable

Regulatory headwinds, particularly the EU's Digital Markets Act, and AI execution risks are valid concerns. But Meta's $70 billion cash pile and $16 billion annual free cash flow provide a cushion. Meanwhile, its AI initiatives are already paying off: Llama's performance in benchmarks surpasses rivals, and its metaverse platform Horizon Worlds has doubled its user base in 2025.

The Bottom Line: Act Before the Split Amplifies Demand

Meta's stock split is a “when,” not “if,” scenario. Investors who wait for the split announcement may miss out on the pre-split buying wave. With its AI-driven growth undervalued, retail-friendly fundamentals, and a split likely in 2025, now is the time to buy.

The split will lower its per-share price to ~$30–$60, making it irresistible to retail traders. But the real value lies in its AI playbook: a platform with 3.9 billion monthly active users, a $160 billion ad market, and the tools to dominate the next wave of AI-driven innovation.

In the words of Warren Buffett: “Be fearful when others are greedy, and greedy when others are fearful.” Meta's stock is neither—yet. Act now before the split sparks a retail-driven rally.

This analysis is based on public financial data and industry trends. Always conduct your own research before making investment decisions.