Artificial intelligence giants Meta Platforms and Microsoft have seen their stock prices soar by 677% and 797% respectively over the last decade. Both companies are making significant investments in AI, which could lead to potential stock splits in 2025. Meta, formerly known as Facebook, has invested billions in virtual reality and AI.
While its VR efforts have yet to yield significant growth, AI has been crucial to its success. Meta’s AI advancements have improved content engagement and ad targeting on its social apps. CEO Mark Zuckerberg envisions a future where AI can handle entire ad campaigns based on business objectives and budgets.
Meta plans to spend between $38 billion and $40 billion in 2024, with substantial increases anticipated in 2025. This spending has resulted in strong revenue and earnings growth, with a 22.5% increase in revenue and a 66% increase in earnings per share through the first nine months of 2024. With shares trading around $600, a stock split could be feasible for Meta in 2025.
Microsoft, a leader in personal computing, has also emerged as a frontrunner in AI. The company’s $10 billion investment in AI in early 2023 bolstered its cloud division, Azure, attracting new AI-focused customers. Azure’s revenue accelerated with 33% growth in the first quarter of fiscal 2025, with faster growth expected later in the year.
Meta and Microsoft AI investments
Microsoft plans to spend roughly $80 billion on AI-enabled data centers in fiscal 2025, up from $55.7 billion in fiscal 2024. The company’s lucrative enterprise software business generates cash as AI features like Copilots enhance worker efficiency and accuracy.
With a stock price above $400, Microsoft may also consider a stock split in 2025. ServiceNow, an enterprise software giant, is another potential candidate for a stock split. The company’s stock price soared by 50% in 2024, outperforming both the S&P 500 and the Nasdaq Composite.
ServiceNow’s current stock price of around $1,000 per share makes it a prime candidate for a split. A stock split is a financial engineering exercise that makes shares more affordable without changing the company’s market capitalization. Companies often opt for stock splits to make their shares more accessible to a broader range of investors, potentially increasing buying activity.
ServiceNow has never completed a stock split in its history as a public company. Given its exceptional market performance and rising share price, the company appears to be a great candidate for a stock split in the near future. Investors should keep an eye on these potential stock splits in the AI industry.
While splits don’t change the fundamentals of a company, they can make high-priced shares more accessible and indicate management’s confidence in the stock’s potential to rise from its new lower price.
Johannah Lopez is a versatile professional who seamlessly navigates two worlds. By day, she excels as a SaaS freelance writer, crafting informative and persuasive content for tech companies. By night, she showcases her vibrant personality and customer service skills as a part-time bartender. Johannah's ability to blend her writing expertise with her social finesse makes her a well-rounded and engaging storyteller in any setting.
