Who doesn’t love a stock split? All of a sudden, with no effort required on your part, you own many more shares of a stock. It certainly sounds great — and lucrative — but stock splits are actually not all they’re cracked up to be.
I’ll explain why, and I’ll offer some possibilities for the biggest stock splits of 2026.
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A standard stock split will increase the number of shares you own — while decreasing the value of each share, proportionately. That last bit in italics is important, because it explains why stock splits shouldn’t get anyone too excited.
A common split formula is 2-for-1, where you end up with two shares for each you owned pre-split, and the share price is halved. A 3-for-1 splits is also fairly common, and lots of other kinds of splits happen, too, such as 4-for-1, 7-for-1, 10-for-1, and so on.
Imagine that you own 10 shares of the Home Surgery Kits Co. (ticker: OUCHH). Let’s say that pre-split, it’s trading a $300 per share. Thus, the total value of your shares is $3,000. Now let’s imagine a 2-for-1 split. When the shares split, you’ll end up with 2 shares for each that you own, or 20 shares. But the share price will suddenly be roughly half of what it was — so around $150 per share. Multiply your 20 shares by the $150 price and you’ll get a total value of… $3,000.
Stock splits are mostly an accounting event, and for most investors, a nothing burger. Companies tend to split their stock when their share price seems out of reach for many investors, among some other reasons.
(Note, too, that reverse splits exist as well. A 1-for-10 split, for example, would turn your 10 shares into one share, multiplying its value 10-fold. It’s typically struggling companies that execute reverse splits, to prop up their share prices.)
We can’t know exactly which stocks will split in the months or year to come until companies officially announce them. But we can speculate. Here are some stocks that seem to be good candidates for splits:
Stock
Recent share price
Booking Holdings
$5,427
Autozone
$3,399
Eli Lilly
$1,080
ASML Holding
$1,072
Costco Wholesale
$866
AppLovin
$694
Intuit
$670
Meta Platforms
$666
Ulta Beauty
$607
Microsoft
$487
Tesla
$454
Broadcom
$350
Coinbase Global
$232
I can’t and won’t predict exactly which splits will happen, but I would expect one or more of these companies to execute a split in the coming year.
Note, too, that even if a company seems in dire need of a stock split, one may not happen. Booking Holdings, for example, has a very steep price, but it was steep last year and the year before, and the company did not split its stock. Indeed, it has never executed a regular split — though it did execute a 1-for-6 reverse split way back in 2003.
As you look for promising companies to fill berths in your long-term portfolio, I’d advise not considering stock splits at all — because there are far more important factors to consider. For example:
Is the company growing, in terms of revenue and net income?
Is it posting earnings instead of losses?
Does it have little or manageable debt, or might its debt load be a burden?
Does it have robust profit margins, and ideally are they growing?
Does it have sustainable competitive advantages, such as economies of scale or a valuable brand?
How does it compare to its peers and rivals?
Is its stock price reasonable or attractive? It can be risky to jump into even a great stock, if it’s overvalued.
So don’t pay too much attention to stock splits. But if one of your holdings does split, go ahead and enjoy owning more shares, while understanding that their total value won’t have changed much, if at all.
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Selena Maranjian has positions in ASML, Broadcom, Costco Wholesale, Meta Platforms, and Microsoft. The Motley Fool has positions in and recommends ASML, Booking Holdings, Costco Wholesale, Intuit, Meta Platforms, Microsoft, Tesla, and Ulta Beauty. The Motley Fool recommends Broadcom and Coinbase Global and recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.
Prediction: These Will Be the Biggest Stock Splits for 2026 was originally published by The Motley Fool
