Prediction: This will be the next artificial intelligence (AI) stock split.

Stock splits have been a big thing this year, with industry leaders launching these efforts to lower their high-flying stock prices. A stock split, by issuing new shares to current holders, lowers a company’s price per share. And among these stock split announcements, many come from artificial intelligence (AI) players — from Nvidia TO Broadcom.

So stocks of companies operating in this high-growth space have taken off. For example, Nvidia and Broadcom have seen their shares rise by more than 300% and 200%, respectively, over the past three years.

And today, with AI stock prices still reaching hundreds of dollars, the stock split wave is far from over. In fact, one stock in particular looks like an excellent candidate due to its solid growth over the past few years, top share price performance and long-term outlook.

Image source: Getty Images.

It trades at over $500 per share

What company am I talking about? My prediction is Meta platforms (META -3.21%) will be the next AI stock to split. The stock is up nearly 50% this year and trades at more than $500 a share. Meta is a member of the “Magnificent Seven,” a group of top-performing tech stocks that have led the market in gains over the past year — and is the only one that has never completed a stock split.

So let’s think about why a stock split would be a good idea for Meta. It’s true that these operations don’t act as catalysts for stock movement because they don’t change anything fundamental about a company – investors won’t buy shares. just because launched a stock split. A stock split does not affect valuation, so a stock will not get cheaper after the deal, even if the price per share is lower.

But a split can still be a very positive move for a company in the long run for two reasons. First, by lowering the share price, a split opens up the investment opportunity to a wider range of investors. Many will no longer have to resort to fractional shares — which may not even be available through their brokerage — to invest in stocks.

Second, a stock split signals to the investment community that the company is optimistic about its future. The idea is that from the new lower price, that particular stock can rise again over time.

One of the cheapest Magnificent Seven stocks

The meta is still one of the least expensive of the Magnificent Seven, second cheapest after Alphabet when considering forward earnings estimates.

META PE Ratio data (before) by YCharts

But at the current price per share, it’s possible that some investors are progressing into uncharted territory. By lowering the price, Meta could expand its pool of potential investors. Now is a great time to launch a split, as investors are interested in companies that are heavily involved in AI, seen as an area with explosive potential in the future.

The AI ​​market is expected to grow from $200 billion today to over $1 trillion by the end of the decade. Meta aims to be at the top and is investing in AI to make it happen. The company has made technology its biggest area of ​​investment this year and said it expects to have 600,000 equivalent H100 computing GPUs on board by the end of the year.

You probably know Meta best for its social media apps, from Facebook to Instagram, and these top platforms bring in billions of dollars in advertising revenue. Meta wants to use AI to improve these apps, which should attract more and more ad revenue over time — and the company’s aggressive investment in AI could also expand its product and service offerings.

Meta’s solid track record of earnings growth means it has the resources to deliver on its plan. Earlier this year, the company announced its first dividend, saying it has the financial strength to reward shareholders and fund growth.

So the timing seems right for a stock split from this company that makes AI its priority, and so my prediction is that Meta will be next on the AI ​​stock split list.