Potential Stock Splits in 2025: 2 AI Stocks Up 115% and 350% in 2 Years to Buy Now, According to Wall Street

Source The Motley Fool

Savvy investors are drawn to stock splits because they are often roundabout indicators of quality businesses. To elaborate, stock splits are only necessary after substantial share price appreciation, which rarely happens to bad businesses. In the past year, several artificial intelligence companies completed stock splits to reset their soaring share prices, as detailed below:

  • Arista Networks has returned 324% in the last two years. The company conducted a 4-for-1 stock split in December 2024.
  • Broadcom has returned 318% in the last two years. The company conducted a 10-for-1 stock split in July 2024.
  • Nvidia has returned 640% in the last two years. The company conducted a 10-for-1 stock split in June 2024.
  • Super Micro Computer has returned 325% in the last two years. The company conducted a 10-for-1 stock split in October 2024.

Shares of Meta Platforms (NASDAQ: META) and Salesforce (NYSE: CRM) soared 350% and 115%, respectively, over the last two years. That price appreciation makes both companies stock-split candidates in 2025. More importantly, Wall Street is generally bullish on Meta Platforms and Salesforce, and certain analysts anticipate material upside.

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Most notably, Barton Crockett at Rosenblatt has set Meta Platforms with a target price of $811 per share. That implies 25% upside from its current price of $647. And Brad Sills at Bank of America has set Salesforce with a target price of $440 per share. That implies 32% upside from its current share price of $333. Read on to learn more.

1. Meta Platforms

Meta Platforms owns four of the seven most popular social media platforms on the planet. That competitive advantage lets the company collect data and target advertising campaigns for brands. Consequently, Meta is the second-largest ad tech company in the world behind Alphabet's Google, and is projected to gain share through 2026, according to eMarketer.

Meta Platforms reported solid financial results in the third quarter, exceeding Wall Street estimates on the top and bottom lines. Revenue rose 19% to $40 billion, operating margin expanded 3 percentage points, and GAAP net income increased 37% to $6.03 per diluted share. Those numbers are particularly impressive given heavy spending on artificial intelligence (AI) infrastructure and Reality Labs.

However, CEO Mark Zuckerberg shared encouraging information about those investments on the third-quarter earnings call. "AI-driven feed and video recommendations have led to an 8% increase in time spent on Facebook and a 6% increase on Instagram this year." Also, he said Meta AI has over 500 million monthly active users, such that it was on pace to become the most used AI assistant by the end of 2024.

Additionally, while Reality Labs is still operating at a substantial loss, Meta recently announced Orion, its first fully holographic augmented reality glasses. And Zuckerberg told analysts, "We're not too far off from being able to deliver great-looking glasses that let you seamlessly blend the physical and digital worlds."

Wall Street expects Meta's earnings to increase at 15% annually through 2025. That consensus estimate makes the current valuation of 30 times earnings look tolerable. Investors with a time horizon of at least three years should consider buying a position today.

2. Salesforce

Salesforce is a customer relationship management (CRM) software vendor. Its platform includes applications that improve productivity across sales, service, marketing, and commerce. It also includes tools for data integration, analytics, and artificial intelligence. Salesforce has 22% market share in CRM software, more than the next four competitors combined.

The company reported reasonably good financial results in the third quarter of fiscal 2025, which ended in October. Revenue rose 8% to $9.4 billion due to strong growth in sales and service software. And non-GAAP net income increased 14% to $2.41 per diluted share. The company also raised the low end of its full-year guidance, such that sales are projected to increase 9% in fiscal 2025.

Salesforce recently launched Agentforce, a platform that provides businesses with digital labor powered by artificial intelligence. AI agents have autonomy that goes beyond that of AI copilots. They can make decisions and take action without human intervention. CEO Mark Benioff says, "No other company comes close to offering this complete AI solution for enterprises."

Wall Street expects Salesforce's adjusted earnings to grow at 12% annually through fiscal 2026, which ends in January 2026. That makes the current valuation of 34 times adjusted earnings look expensive. But analysts may be underestimating the company's future earnings growth, as they have in the past.

Specifically, Salesforce beat the consensus earnings forecast by an average of 4% in the last six quarters. That trend may continue in the coming quarters, especially if Agentforce gains tractions with customers. I think that creates an opportunity for patient investors. But it makes sense to start with a very small position given the elevated valuation.

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*Stock Advisor returns as of January 21, 2025

Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. Bank of America is an advertising partner of Motley Fool Money. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Trevor Jennewine has positions in Arista Networks and Nvidia. The Motley Fool has positions in and recommends Alphabet, Arista Networks, Bank of America, Meta Platforms, Nvidia, and Salesforce. The Motley Fool recommends Broadcom. The Motley Fool has a disclosure policy.

Disclaimer: For information purposes only. Past performance is not indicative of future results.
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