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After Meta, Could These Be Wall Street’s Next Blockbuster Stock Splits?
Key Points
Micron Technology has excellent medium-term prospects as it capitalizes on the shortage of memory chips.
MercadoLibre’s short-term investments could pay off, even as they have led to lower-than-expected profits in the short run.
Both companies have high share prices and could conduct stock splits in the next few years.
Could stock-split mania take over Wall Street in the next few years? On the one hand, many corporations are capitalizing on artificial intelligence (AI) and have seen their share prices soar, potentially triggering a wave of blockbuster stock splits. And one could also argue that Meta Platforms (NASDAQ:META) just kicked things off by announcing a 2-for-1 stock split that will create a brand-new category of non-voting shares.
That will allow the tech leader to issue shares to finance its AI-related ambitions without reducing the voting power of its CEO, Mark Zuckerberg.
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However, it is always hard to predict upcoming stock splits, even if some signs point in that direction. That said, if there are more stock splits on the horizon, here are two companies that could join the club: Micron Technology (NASDAQ:MU) and MercadoLibre (NASDAQ:MELI).
Image source: The Motley Fool.
1. Micron Technology
Micron Technology designs and sells computer memory chips. Demand for the company's products has soared amid the massive ongoing AI build-out, and the semiconductor specialist is reaping the benefits. Micron's revenue and net income have reached all-time highs.
MU Revenue (Annual) data by YCharts
What's more, the AI tailwind could be far from over. Not only are Micron's chips in high demand, but there is also a severe shortage, giving it significant pricing power. Consider, for instance, that Amazon (NASDAQ:AMZN) increased its capex guidance for 2026 from $200 billion to $220 billion, partly due to higher memory chip prices. Microsoft (NASDAQ:MSFT), another hyperscaler, also attributed some of its massive capex guidance for the year to rising memory chip prices. This helps highlight the scale of the opportunity for Micron.
Further, the shortage of memory chips might last at least a couple more years. Micron's shares have gained significant value this year on the back of excellent financial results, and despite a pullback in recent months, the company's prospects remain bright.
Shares are currently changing hands for about $983 apiece. Of course, there is no generally agreed-upon price at which a company must split its stock. Still, if Micron performs well over the next year or two and continues to capitalize on the soaring demand for its products, the company could decide to split its stock.
It has done so before, but the last time was in 2000 -- another reason why the time may be ripe for a stock split. Even if management doesn't announce one, Micron's position in the memory chip market and the industry's rapid growth make it an attractive stock to buy and hold.
2. MercadoLibre
MercadoLibre has faced challenges over the past year. Stiff competition in the e-commerce market in Latin America is forcing the company to make business investments that are harming short-term profits. MercadoLibre's shares have lagged broader equities as a result. However, the stock remains fairly expensive.
As of writing, shares are trading at about $1,673 each. Besides, MercadoLibre could bounce back in the medium term as the company's investments start to pay off. MercadoLibre has extended free shipping offers across various markets.
This can attract more customers and even increase purchase amounts per customer. That can potentially mean higher gross merchandise volume and revenue for the e-commerce specialist. The company is also doubling down on its banking ambitions, another attractive growth avenue, since many people in the regions it serves remain underbanked.
The short-term hit to profits is worth the investment, especially since MercadoLibre operates in a region with one of the fastest rates of e-commerce growth in recent years. The company boasts a wide moat from network effects and switching costs which, together with its investments, could allow it to ride this tailwind. And if the share price grows significantly over the next few years, MercadoLibre could opt for a stock split.
True, the company has never conducted a stock split, and management may keep things that way. Whatever MercadoLibre decides, though, it's worth sticking with the company for the long term. Thankfully, plenty of online trading platforms offer fractional shares.
Prosper Junior Bakiny has positions in Amazon, MercadoLibre, and Meta Platforms. The Motley Fool has positions in and recommends Amazon, MercadoLibre, Meta Platforms, Micron Technology, and Microsoft. The Motley Fool has a disclosure policy.