When a company decides to split its stock, it usually comes after an extended period of strong performance. While a stock split doesn't change any of the underlying fundamentals of a stock, it can be a sign of confidence from management that it thinks the stock can continue climbing. It wouldn't split shares if it felt there were a good chance the stock could drop significantly.
Companies that split their shares are usually performing well already, but the announcement of the split can serve as another catalyst, spurring investor excitement in the stock. As a result, it's best to get into a stock before it splits its shares. While a potential split isn't a great reason in and of itself to buy a stock, it could be a cherry on top of a great investment based entirely on fundamentals.
That's why Meta Platforms (META 0.78%) and Coinbase Global (COIN +2.48%) look like interesting opportunities after climbing 450% and 550%, respectively, over the last three years. They have triple-digit share prices, and Wall Street sees further upside for both companies. That could lead them to announce stock splits in 2026, but they're both worth buying regardless of management's decision.
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Meta Platforms: Up 450% since December 2022
Meta Platforms has spent heavily on building out its artificial intelligence (AI) capabilities. Investors sent the stock soaring in 2023 and 2024 as Meta emerged as a big beneficiary of artificial intelligence improvements while cutting operating expenses. However, investors cooled on the stock somewhat in 2025 as the company spent more on AI specialists while pouring tens of billions into new data centers.
Investors sent shares plummeting after Meta released its third-quarter earnings, due to concerns about its AI spending plans for 2026. Management expects another big step up from its projected $70 billion to $72 billion capital expenditure budget for 2025, likely topping $100 billion next year. As a result, shares have only climbed 13% in 2025, although they were up nearly 35% at one point.
There's a good reason for Meta to invest so much in AI. It's already getting results from its spending. That's best exemplified by the increases in both ad prices and ad impressions last quarter. It's very rare for Meta to be able to increase both metrics at the same time, and it shows its algorithms are doing a better job of targeting and converting ads while keeping users engaged with great content recommendations.
NASDAQ: META
Key Data Points
The long-term potential for Meta with AI is also quite substantial. Meta's developing an AI agent for advertisers that can create and optimize ad campaigns for small businesses, which should increase the number of active advertisers and the amount they spend on the platform. AI-assisted content generation could lead to more engaging content for users, thereby increasing the time they spend on the platform. And its Meta AI chatbot is growing quickly and represents an untapped revenue opportunity. Long-term, generative AI may be instrumental in expanding the possibilities of augmented reality, which remains a relatively small business compared to Meta's main advertising business.
While Meta has big plans to increase spending on AI in 2026, it should be able to produce solid free cash flow as the advertising business continues to grow. Earnings growth may slow as depreciation expenses rise due to the cumulative capital expenditures of the last few years. The median price target on Wall Street is $837, representing a 25% upside from its current price. With shares trading in the high triple digits, it would be reasonable for the company to consider splitting its shares.
Coinbase: Up 550% since December 2022
Coinbase Global has positioned itself as a trusted cryptocurrency exchange amid an industry that's faced severe corruption throughout its history. Since it's seen as safe and reliable, it's able to charge a premium for its services. As a result, its biggest source of revenue is consumer transaction fees.
Those transaction fees are susceptible to the fluctuations of the cryptocurrency market. When prices are rising and investors are eager to invest, Coinbase typically sees higher trading volume. When prices drop, nobody wants to trade crypto. With the recent slump in Bitcoin's price, Coinbase stock is now roughly flat on the year, despite being up nearly 70% at one point.
But there are reasons to remain optimistic about Coinbase. First, it benefits from a virtuous cycle. Its reputation not only gives it pricing power, but it also creates a network effect. Those looking to trade Bitcoin are drawn to the liquidity offered on Coinbase's platform, which attracts more cryptocurrency holders, thereby increasing liquidity and attracting larger investors. That's especially valuable as Coinbase looks to attract more institutional investors with premium services and derivative products.
NASDAQ: COIN
Key Data Points
That said, many may see the growing variety of cryptocurrency exchange-traded funds (ETFs) as a major hurdle to attracting more volume from both consumers and institutions. However, Coinbase has won the majority of contracts to act as custodian for cryptocurrency funds, building an important line of business for the company.
The other major business for Coinbase is its stablecoin, USDC, which it offers in partnership with Circle. Coinbase earns interest on the collateral used to back USDC by investing in U.S. Treasury bills. It shares some of those rewards with users who hold USDC on its platform, but it's moved to restrict that only to those who subscribe to its Coinbase One service as the Federal Reserve lowers interest rates. That should help protect its bottom line.
The median price target for Coinbase on Wall Street is $372. That represents approximately a 53% upside from its current price. The stock is already somewhat pricey, with a forward P/E of about 36, but if Bitcoin experiences another bull run in 2026, it could easily propel the stock higher. The volatility of the company may dissuade management from announcing a split early, but with shares solidly in the triple-digit price range and long-term trends supporting it to move higher, it's certainly a candidate for a split.
