Nvidia‘s (NASDAQ: NVDA) recent announcement of a 10-for-1 stock split has set tongues wagging in the financial realm. The AI chip titan’s decision marks its first stock split since the tech surge of the pandemic era. Nvidia’s move aligns with the trend among the “Magnificent Seven,” a cohort of tech giants that have been eager to divide and conquer.
In the saga of the Magnificent Seven, five members have opted for share splits in the last four years, with two, including Nvidia, going for round two. The table below chronicles these splits, offering insights into the collective psyche of these high-flying tech entities.
| Company | Date | Size of Split |
|---|---|---|
| Apple | Aug. 28, 2020 | 4-for-1 |
| Tesla | Aug. 31, 2020 | 5-for-1 |
| Nvidia | July 20, 2021 | 4-for-1 |
| Amazon | June 6, 2022 | 20-for-1 |
| Alphabet | July 15, 2022 | 20-for-1 |
| Tesla | Aug. 24, 2022 | 3-for-1 |
| Nvidia | June 7, 2024 | 10-for-1 |
Data source: Company reports.
The absence of Microsoft (NASDAQ: MSFT) and Meta Platforms (NASDAQ: META) from this list is conspicuous. But as the dust settles from Nvidia’s split, these two looming giants find themselves in the spotlight, with their towering individual share prices hinting at potential splits on the horizon.
As we pivot to dissect the cases of these two contenders, let’s embark on this journey of speculative daring.
Image source: Getty Images.
Will Microsoft Step Up to the Splitting Plate?
Microsoft’s stature as the most valuable company globally, boasting a market cap north of $3 trillion, adds gravity to any discussion about potential stock splits. Despite a history dotted with splits during the dot-com era, Microsoft has been on a splitting sabbatical since the early 2000s, with its last 2-for-1 split occurring in February 2003.
Climbing out of its dot-com era struggles, Microsoft has been reforged under the leadership of CEO Satya Nadella, propelling the company to new heights. Strategic investments in cloud computing, exemplified by Microsoft Azure, have emerged as lucrative ventures. Nadella’s brainchild, Microsoft Azure, now leads the cloud computing division with a proud legacy of success. Furthermore, Microsoft’s engagement in the generative AI revolution through OpenAI, with an estimated investment of a staggering $13 billion, cements its position at the frontier of innovation.
With stocks that have soared tenfold during Nadella’s reign, Microsoft now stands tall with share prices exceeding $400, making it one of the priciest stocks on the Dow Jones Industrial Average. The question lingers: Will Microsoft take the plunge into a stock split territory to align with the Dow’s price-weighted index preferences?
Will Meta Platforms Make a Bold Leap?
Meta Platforms’ narrative diverges from its Magnificent Seven cohorts as it holds its ground as the only member yet to embrace a stock split. Launching its IPO back in 2012 with an opening share price of $38, Meta Platforms has witnessed substantial growth, with shares now valued at $477.
Despite this remarkable trajectory, Meta Platforms reels at the helm of uncharted waters, never having navigated the terrain of stock splits. While recent forays into dividend payments hint at a shift in corporate strategy, the topic of stock splits remains veiled in silence among Meta’s executives.
Although the current share price may not incite imminent split expectations, Meta Platforms flaunts a higher price compared to its Magnificent Seven peers. A stock split could, in the eyes of many, render the shares more alluring to retail investors, potentially bolstering Meta’s bid for Dow admission by aligning its share price with the average Dow stock.
The Next Chapter of the Split Saga
In the realm of stock splitting, Meta Platforms looms as the likelier candidate for the next big move. With a higher share price and lower market cap than its counterpart Microsoft, Meta Platforms braces for the winds of change, poised to make a compelling splash in the stock market.
While the future remains uncertain, the writing on the wall hints at a probable stock split in Meta’s trajectory, aligning with the company’s upwards price movement.
Should You Bet on Meta Platforms Right Now?
Pause before you leap into Meta Platforms stocks, for wisdom often tempers haste. Consider this:
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Think back to Nvidia’s entry into the affiliate list on April 15, 2005. Could similar fortunes await those who dare tread the Meta Platforms path? An investment of $1,000 at the time of Nvidia’s endorsement would now bloom into an impressive $741,362*
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Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool’s board of directors. Jeremy Bowman has positions in Meta Platforms. The Motley Fool has positions in and recommends Meta Platforms, Microsoft, and Nvidia. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.