Potential Stock Splits in 2025: 2 AI Stocks Up 510% and 4,700% Since Early 2023 to Buy Now, According to Wall Street

Smart investors are drawn to stock splits for two reasons. Most obviously, splits make stocks cheaper by reducing the share price. But more importantly, stocks that split have historically doubled the return of the S&P 500 (SNPINDEX: ^GSPC) during the following year.

Shares of Meta Platforms (NASDAQ: META) and AppLovin (NASDAQ: APP) have advanced 510% and 4,700%, respectively, since January 2023 as of Feb. 17. Both companies are stock-split candidates after that price appreciation, and both stocks are worth buying, according to Wall Street.

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• Among the 75 analysts that follow Meta Platforms, 87% rate the stock a buy.
• Among the 27 analysts that follow AppLovin, 74% rate the stock a buy.

Here's what prospective investors should know about Meta Platforms and AppLovin.

Meta Platforms: Up 510% since January 2023

Meta Platforms owns four of the seven most popular social media platforms in the world, including Facebook and Instagram. Its ability to engage consumers and source data makes it a valuable advertising partner for brands. In fact, Meta Platforms is the second largest adtech company in the world behind Alphabet's Google.

The company is leaning on artificial intelligence (AI) to reinforce its strong market presence. CEO Mark Zuckerberg says Meta AI is the leading conversational assistant worldwide, and he expects it to reach more than 1 billion people in 2025. He also mentioned the launch of an AI engineering agent this year, a product he says may be "one of the most important innovations in history."

Meta reported encouraging financial results in the fourth quarter that beat expectations on the top and bottom lines. Daily active users climbed 5% to 3.35 billion, meaning over 40% of the global population engages with at least one social media property on a daily basis. In turn, revenue increased 21% to $48 billion, and generally accepted accounting principles (GAAP) net income surged 50% to $8.02 per diluted share.

Wall Street estimates Meta's earnings will increase at 10% annually through 2026. That makes the current valuation of 30 times earnings look pricey. However, analysts have underestimated the company on a consistent basis. Its earnings beat the consensus by an average of 13% over the last six quarters, and that pattern could continue as Meta monetizes new products like Meta AI, Reels, and Threads. Investors should consider buying a few shares today.

AppLovin: Up 4,700% Since January 2023

AppLovin sells adtech software that helps developers market and monetize their mobile applications. Its primary products, AppDiscovery and Max, use powerful machine learning models to match advertisers with publishers (companies that own digital ad inventory). The former helps developers acquire new users, and the latter helps developers make money on their apps by selling advertising inventory.

Importantly, AppLovin also owns a development studio that designs mobile games, which are monetized through in-app purchases and advertising. However, the company plans to sell that part of its business for $900 million. Doing so will let AppLovin focus exclusively on adtech software, including its nascent marketing product for e-commerce brands.

AppLovin reported strong financial results in the fourth quarter, crushing estimates on the top and bottom lines. Revenue increased 44% to $1.4 billion, profit margin expanded 25 percentage points, and GAAP net income increased 253% to $0.49 per diluted share. Those results were driven by strong sales growth in the advertising business, offset by a sales decline in its apps business.

Going forward, Wall Street forecasts that AppLovin's earnings will grow at 42% annually through 2026. That makes the current valuation of 110 times earnings look expensive. However, earnings growth may grow more quickly than anticipated in the coming quarters as AppLovin leans into its e-commerce advertising product, which creates an opportunity. Risk-tolerant investors should consider buying a very small position today.

Should you invest $1,000 in Meta Platforms right now?

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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. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Trevor Jennewine has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet, AppLovin, and Meta Platforms. The Motley Fool has a disclosure policy.