The Motley Fool·2025-10-09 07:06Core Insights - The article discusses the potential for stock splits among major companies, particularly Meta Platforms and Microsoft, highlighting the significance of retail investor ownership as a catalyst for such announcements in 2026 [1][6][14] Group 1: Stock Splits and Market Trends - Stock splits are viewed positively by investors, especially forward splits, which aim to make shares more affordable for retail investors [2][5] - Companies that enact forward splits tend to outperform the S&P 500 in the year following the announcement, making them attractive to investors [6] - Meta Platforms is positioned for a potential forward split due to its high retail investor ownership and share price dynamics [7][8] Group 2: Meta Platforms' Position - Over 28% of Meta's outstanding shares are held by retail investors, and its share price has been consistently above $700, indicating a potential need for a stock split [8] - Meta generates nearly 98% of its net sales from advertising across its platforms, which provides a strong revenue base [10] - The company boasts an impressive user base, with 3.48 billion daily active users, enhancing its advertising pricing power [12] - Meta's financial health is robust, with over $47 billion in cash and equivalents, allowing for significant investments in future technologies [13] Group 3: Microsoft’s Potential for Stock Split - Microsoft is also a candidate for a forward stock split, having a share price above $500 and over 33% of its shares held by retail investors [16] - The company has a history of stock splits, with the last one occurring in 2003, indicating a precedent for such actions [15] - Microsoft's Azure segment is experiencing strong growth, bolstered by the integration of AI solutions, which could drive stock performance [17] - The company maintains a strong cash position, with $94.6 billion in cash and equivalents, positioning it well for future growth and potential stock splits [19]