In the year Stock dividends were a major market theme in 2024, with some of the world’s biggest names joining the list. Sectors across companies, from Walmart to the Chipotle Mexican GrillHe started such works last year. And Nivea And Broadcom It has led the wave in the artificial intelligence (AI) industry, with each achieving a 10-to-1 stock dividend.
Why do investors love stock dividends? Although they don’t change anything fundamental about a company, they lower the stock price, making the stock more accessible to more investors. And the move could be seen as a sign of confidence from management that the stock has what it takes to rise from new lows.
Therefore, it is reasonable to expect that investors will always expect a stock dividend, especially when the stock price of a highly successful company reaches a high. And one particular AI company now seems ripe for division. The stock is up 65% over the past year and is trading above $600 today. My prediction is that this well-known company will be the next AI player to announce a split.
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Before I name this company, let me give you one more clue about who it is. This is the only member of the tech giant. The wonderful seven“- Stocks that posted market gains last year — haven’t started yet.” Stock split. I’m talking. Meta forums(NASDAQ: META )Owner of social media platforms Facebook, Messenger, WhatsApp and Instagram.
Thanks to the dominance of social media — more than 3.2 billion people use at least one app every day — Meta’s revenue and profits have soared by billions of dollars. And the shares have followed an upward path, trading at record highs today.
Meta generates most of its revenue through advertising, and advertisers want to find us where they know to find us — using one of the company’s apps. But Meta has expanded significantly into AI, making it the company’s biggest area of investment in the past year — and Meta has signaled it will ramp up its AI investments this year as well.
CEO Mark Zuckerberg says he wants to make AIs that all Meta users can rely on for anything that matters to them — from business to entertainment. To get there, the company developed its own large language model (LLM) and is now training its latest version, Llama 4. On the most recent earnings call, Zuckerberg said that Meta has rapidly adopted the recently released Meta AI — the company’s first. AI assistant — and Llama “is quickly becoming the standard in the industry.”
Meta can win in AI in different ways. First, the more we spend on meta apps — thanks to possible AI tools and features — the more advertisers want to invest in getting us there. This equates to more revenue for Meta.
Second, Meta AI investments can lead to other AI products and services. Ultimately, Meta’s work in LMMS and making it available to the developer community could help the company stand out as an AI leader. So the meta is heading into an exciting new era of development.
Now let’s consider my prediction. Why is it a good time to split the meta stock? Above $600, Meta may scare off some investors — even though valuation looks very reasonable at 24x forward earnings estimates. The $1,000 per share level represents a psychological hurdle for some investors, who may consider the stock to be worth whatever it is. Therefore, companies that are starting to approach this level may consider starting an operation to avoid this problem.
Also, some investors don’t have access to fractional stocks — and may not have the budget to invest in meta at today’s levels. Therefore, a stock split, by issuing more shares to current owners and lowering the stock price, can open up investment opportunities for these buyers.
Finally, as mentioned, Meta should see further growth going forward thanks to its investment in the AI area — so the stock has what it takes to break out of its new low price point.
All of this supports the idea of declaring a stock split and that’s why I think Meta will be the next AI player to make such a move. And while it’s not all good news, Meta still represents a strong long-term buy-and-hold candidate for growth investors.
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Randy Zuckerberg, former director of market development and Facebook spokesperson and sister of Meta Platforms CEO Mark Zuckerberg, is a member of the Motley Fool’s board of directors. Adrian Cimino It has no place in the said shares. He has a spot in the Motley Fool and recommends Chipotle Mexican Grill, Meta Platforms, Nvidia and Walmart. The Motley Fool recommends Broadcom and the following options: Short December 2024 $54 puts on Chipotle Mexican Grill. The Motley Fool has Disclosure Policy.
