Anticipated Stock Divisions in 2025: Two AI Shares Soaring 510% and 4,700% Since January 2023, Suggest Wall Street Investments for Immediate Purchase
Smart investors find appeal in stock splits for two primary reasons. Firstly, splits lower the share price, making stocks more affordable. But more significantly, historically, stocks that split have exceeded the return of the S&P 500 by almost double the next year.
As of February 17, 2023, Meta Platforms (META) and AppLovin (APP) have soared 510% and 4,700%, respectively, since January 2023. Given their impressive performance, both companies are candidates for future stock splits and are highly recommended by Wall Street.
Meta Platforms, with its 87% 'buy' rating by 75 analysts, and AppLovin, with its 74% 'buy' rating from 27 analysts, boast strong support from the investment community. Let's dive deeper into these two high-flyers.
Meta Platforms: Soaring 510% since January 2023
Owning four of the seven most popular social media platforms globally, Meta Platforms, including Facebook and Instagram, has a significant edge in advertising and data collection. High on innovation, Meta is reinforcing its market dominance with artificial intelligence (AI). CEO Mark Zuckerberg boasts that Meta AI is the world's most powerful conversational assistant and expects it to reach over 1 billion users by 2025. This year also marks the debut of an AI engineering agent, potentially one of history's most significant innovations.
Financially, Meta demonstrated impressive results in Q4, beating expectations on both the top and bottom lines. The company's daily active users jumped 5% to 3.35 billion, with a 21% revenue increase to $48 billion, and a GAAP net income surge of 50% to $8.02 per diluted share.
Analysts project Meta's earnings to grow at 10% annually through 2026. However, the current valuation of 30 times earnings could be considered expensive. Yet, history suggests that Meta's earnings have consistently surpassed expectations by an average of 13% over the last six quarters. A prudent investment approach could include buying a few shares at present.
AppLovin: Powering 4,700% since January 2023
Based in Palo Alto, California, AppLovin offers adtech software designed to help developers market and monetize their mobile applications. Its primary offerings, AppDiscovery and Max, leverage advanced machine learning algorithms to connect advertisers with publishers and enhance revenue generation. At present, AppLovin is divesting its mobile game development division, focusing solely on adtech software, including its e-commerce marketing solution.
AppLovin reported a robust 44% revenue growth in Q4, boosted by a surge in advertising sales. The company's profitability enhanced significantly, with its GAAP net income growing by 253% to $0.49 per diluted share.
Analysts predict a 42% annual Earnings Per Share (EPS) growth for AppLovin through 2026. However, its 110 times EPS valuation currently appears high. Regardless, its innovative e-commerce marketing tool may pave the way for accelerated earnings growth, making it an intriguing opportunity for investors with a high risk tolerance.
Enrichment data suggests that stocks that undergo stock splits have a historical tendency to outperform the broader market. Bank of America found that stocks following a split can deliver returns of 20-25% in the following 12 months, outperforming the average market by roughly 10%. This trend may indicate that stock splits often signify robust future performance.
- Given Meta Platforms' strong financial performance and historical tendency to surpass earnings expectations, intelligent investors may underestimate its potential growth after a potential stock split in 2025.
- The significant increase in AppLovin's shares since January 2023, coupled with its innovative e-commerce marketing tool, could make it an attractive investment opportunity, especially if the company decides to undergo a stock split in the future.
- Smart investors might consider adding Meta Platforms or AppLovin stocks to their portfolios, considering their impressive gains and historically high performance following stock splits, such as the one projected for Meta in 2025.
4.Analyzing the history of stock splits, it is evident that finance-driven individuals often overlook the potential growth of companies following a split, such as the anticipated rise of Meta Platforms' stocks by 20-25% in the following year, as suggested by Bank of America's research.
