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Tech Stocks May See Price Surge with Upcoming Stock Splits

A report highlights potential stock splits for leading tech companies MercadoLibre, ASML, and Salesforce. With substantial revenue growth and impressive EPS projections, these splits could attract more retail investors, influencing their stock prices positively.

Date: 
AI Rating:   7

The report discusses the recent trend of stock splits among popular tech stocks and emphasizes their potential to draw in smaller investors. Notably, three companies are identified as ripe for stock splits: MercadoLibre, ASML, and Salesforce.

MercadoLibre

MercadoLibre has demonstrated remarkable growth, with its revenue increasing at a compound annual growth rate (CAGR) of 38% from 2007 to 2023. Analysts predict its revenue will grow at a CAGR of 27% from 2023 to 2026, alongside a striking 51% expected growth in earnings per share (EPS). Given this robust revenue and EPS growth, MercadoLibre's stock is positioned to attract more investors if a stock split occurs, creating easier access to its otherwise high share price.

ASML

ASML has experienced steady revenue growth at a CAGR of 15% from 1996 to 2023. Analysts forecast its revenue will continue to rise at a CAGR of 13% from 2023 to 2026, with EPS also expected to grow at a CAGR of 19%. Although facing some export challenges to China, ASML's unique market position and innovative technology represent strong potential, which could be amplified by a stock split making it more affordable for retail investors.

Salesforce

Salesforce shows a different pattern with a CAGR of 35% for revenue from fiscal 2004 to fiscal 2024. However, growth is projected to slow down to a CAGR of only 9% from fiscal 2024 to fiscal 2027. Despite this slowdown, analysts expect EPS to increase at a CAGR of 27%. Given its substantial past performance and current valuation metrics, a split might also rejuvenate interest in Salesforce stock among retail investors.

Overall, the potential stock splits of these companies, combined with impressive growth metrics, suggest a favorable outlook for investors. Increased accessibility through stock splits could lead to heightened demand and influence stock prices positively.

Stocks:  NASDAQ:MELI NASDAQ:ASML NYSE:CRM