Source: Jin10 Data

In terms of stock splits,$Meta Platforms (META.US)$is the only company among the "Big Seven" that has not split its stock. In the stock split trend, the Meta platform appears somewhat different. Recently,$NVIDIA (NVDA.US)$, $Sony (SONY.US)$, $Lam Research (LRCX.US)$ and $Chipotle Mexican Grill (CMG.US)$ have all announced stock splits. $Walmart (WMT.US)$ also underwent a stock split earlier this year.

Stock splits do not change the value or fundamentals of a company. The misconception that stocks become "cheaper" after a split is due to a lower stock price per share. However, lowering the stock price may make it more attractive to individual investors. Chris Senyek, chief investment strategist at Wolfe Research, stated in a report last Thursday, "Stock splits are a financial engineering mechanism that lowers a company's stock price while increasing the corresponding number of shares. Splits do not change the intrinsic value of any company! However, they may make a company's stock more attractive to some retail investors and increase speculative investing."

Meta, which owns Facebook, Instagram, and other social media sites, has never split its stock. Its stock currently trades just below $470. Therefore, Meta may be the next high-profile company to lower its stock price through a split. Senyek noted in the report that Meta is the only company among the "Big Seven" that has not split its stock.$Apple (AAPL.US)$has split four times, most recently in 2020, and prior to that, in 2014.$Amazon (AMZN.US)$has split three times, most recently in June 2022. After the splits, Amazon and Apple were added to the Dow Jones Industrial Average.$Tesla (TSLA.US)$There were two splits in 2020 and 2022.$Alphabet-A (GOOGL.US)$Netflix (NFLX.US) is not a member of the "Seven Giants," but as part of the old FAANG club, it also had two splits, the most recent being in 2015. Then there is Microsoft (MSFT.US). The world's most valuable company has undergone seven splits in its corporate history, but the most recent was in February 2003, more than 20 years ago. This has led Senyek to wonder if Meta or Microsoft will be the next companies to announce splits. Currently, their stock trades at around $420. Bank of America's global research strategist noted in a recent report that the $500 stock price threshold seems to be a barrier that companies consider when splitting. When asked by Barron's if they were considering a stock split, Microsoft had no comment. Meta also had no comment. Although a stock split does not materially change a company other than lowering its share price, the Bank of America strategist noted that splits do tend to further boost already high-flying stocks. The strategist wrote, "total return of stocks in the 12 months after the split announcement reached 25%, compared with 12% for the entire index. Splits have increased returns in every decade, including the poor performing 2000s for the S&P 500 index." Given this, don't be too surprised if Meta and Microsoft split their stocks soon. The Bank of America analyst may have said it best in the title of its report on stock splits: "Big Tech Getting Smaller."$Netflix (NFLX.US)$not a member of the "Seven Giants," but as part of the old FAANG club, also had two splits, the most recent being in 2015.

Then$Microsoft (MSFT.US)$The world's most valuable company has undergone seven splits in its corporate history, but the most recent was in February 2003, more than 20 years ago. This has led Senyek to wonder if Meta or Microsoft will be the next companies to announce splits. Currently, their stock trades at around $420. Bank of America's global research strategist noted in a recent report that the $500 stock price threshold seems to be a barrier that companies consider when splitting. When asked by Barron's if they were considering a stock split, Microsoft had no comment. Meta also had no comment. Although a stock split does not materially change a company other than lowering its share price, the Bank of America strategist noted that splits do tend to further boost already high-flying stocks. The strategist wrote, "total return of stocks in the 12 months after the split announcement reached 25%, compared with 12% for the entire index. Splits have increased returns in every decade, including the poor performing 2000s for the S&P 500 index." Given this, don't be too surprised if Meta and Microsoft split their stocks soon. The Bank of America analyst may have said it best in the title of its report on stock splits: "Big Tech Getting Smaller."$S&P 500 Index (.SPX.US)$in each decade where the S&P 500 index has performed poorly has increased the return.

Considering this, don't be too surprised if Meta and Microsoft split their stocks soon. The Bank of America analyst may have said it best in the title of its report on stock splits: "Big Tech Getting Smaller."

Editor / jayden