What Is a Stock Split? I Think the Next Wave of Splits Could Create Buying Opportunities Before 2027.

When stocks trade around $1,000, it's a psychological milestone at which investors start wondering whether a split will occur. After all, shareholders don't want retail investors to be priced out, which could limit buying activity and prevent the share price from rising even higher.

There are two stocks I've been watching that have both traded above and below $1,000 in 2026. That said, based on analyst price targets, they could trade well above $1,000 by September 2027, making them potential candidates for a stock split and worth considering as an investment before then.

The two companies are Costco Wholesale (NASDAQ: COST) and Micron Technology (NASDAQ: MU), which I'll dive into more in just a minute. But first, I'll offer a quick overview of why a company would consider splitting its stock, why a stock split may seem less necessary to a company's management team than in the past, and an example of a stock split from 2026.

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Why do companies split their stock?

There are forward and reverse stock splits, but since Costco and Micron are candidates for forward splits, we'll focus on that today.

As mentioned, one reason a company may conduct a forward stock split is concern that retail investors are being priced out of the stock. There isn't an exact dollar figure for that, but many shareholders may start wondering about a stock split when the share price hits $1,000 or more.

With the advent of fractional investing, however, that's becoming less of a concern, as more people have the freedom to now invest in dollar amounts rather than being forced to buy whole shares. In a way, not splitting a stock looks out for shareholders, as a management team may not want to create a short-term price jump, followed by a decline, from excitement surrounding a stock split announcement.

Still, they do occur. One example from 2026 is Booking Holdings, which traded above $4,000 per share before completing a 25-for-1 stock split on April 2.

How do stocks that split perform?

According to research from Bank of America, as reported by Statista, there appears to be positive data for companies that conduct a split. Over a four-decade period, the research found that companies that split their stock saw an average total return of 25.4% in the year following the announcement of the split, twice the average return of the S&P 500 (SNPINDEX: ^GSPC) during those periods.

What's worth keeping in mind is that it's only the average, and some stocks can perform worse or better. That leads us to Costco and Micron.

A potential Costco stock split

Costco Wholesale shares closed at $904.70 on Sept. 23 and have mostly treaded water in 2026, up 4.9% as of this writing. That could be for a multitude of reasons. Still, one major contributing factor could be Costco's richly valued status, with a forward price-to-earnings ratio of 40.1, which sets high expectations and leaves it little room for error.

That said, as Costco opens more stores, reaches more customers, and expands its online business, the stock price could find its footing and begin marching back toward its 52-week high of $1,096.50. That, at least, is a potential scenario for the stock price based on analyst projections.

According to CNN, the 41 analysts covering the stock have a median one-year price target of $1,100. From the Sept. 23 closing price of $904.70, that represents a potential gain of 21.5%. The group's highest target is $1,315, representing a potential gain of 45.3%.

There's no guarantee Costco will reach either of those prices or that the management team will split the stock if it does. But trading above $1,000 may warrant more consideration of a split than the current level.

A potential Micron stock split

Micron is another company that may be in a position to consider a stock split by this time next year. Similar to Costco, Micron's stock price may have gotten a little ahead of itself, climbing to $1,255 over the past 52 weeks. But as of the Sept. 23 closing price, shares closed at $1,071.88, down 14.5% from that 52-week high.

There are several potential reasons for that decline, ranging from sell-offs of companies connected to artificial intelligence to worries that Micron will eventually lose its favorable margins as supply catches up to demand. But as Micron locks in more long-term contracts to avoid the boom-and-bust cycles that memory and storage makers have been known for, and that's appreciated more around Wall Street, I believe the sentiment around Micron will favorably shift, helping reignite more excitement.

Based on 57 analyst outlooks, the median one-year price target is $1,600, representing a 49.2% gain from the Sept. 23 closing price of $1,071.88. The most bullish target from that group, $2,200, would be a 105.2% gain. Falling within that range by this time next year could warrant consideration for a stock split.

Bank of America is an advertising partner of Motley Fool Money. Jack Delaney has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Booking Holdings, Costco Wholesale, and Micron Technology. The Motley Fool has a disclosure policy.