In this article, we will take a look at the 9 Stocks to Invest In Before They Split Next.
Stock splits often attract investor attention, but their impact is frequently misunderstood. A stock split has no effect on the firm’s fundamental strength or stock valuation, but it increases the number of shares while proportionally lowering the share price. This improves liquidity in the stock and makes it more accessible and affordable to a broader base of investors.
Notably, data from Bank of America suggest that stocks announcing splits outperform the S&P 500, with an average 12-month return of 25.4% compared to the index’s approximately 9%-12% increase. This is frequently driven by market optimism and solid underlying fundamentals.
The financial markets are in an interesting time right now. Despite rising oil costs, increasing Treasury yields, and persistent global disruptions, the broader market has remained resilient, thanks in large part to continued enthusiasm for artificial intelligence.
CIO Group Chief Investment Strategist Steven Whiting, speaking to CNBC on ‘the Closing Bell’, noted that the potency of the AI trade contributes to this gap. He points out that investment in AI, especially in software and hardware, is not directly related to the typical economic cycle.
However, Whiting warns that the global economy is beginning to exhibit signs of strain. Ongoing disruptions to important transportation routes are likely to cause bottlenecks, which could eventually limit economic activity. Although demand may stay steady, the movement of commodities is strongly reliant on energy supply. He added that rising oil prices, particularly for future supplies, indicate that markets expect prolonged disruptions.
Whiting is also skeptical of the Federal Reserve’s ability to impact the current economic environment. Supply-side shocks, particularly in the energy sector, are difficult to resolve with interest rate modifications alone. He raised questions if policymakers can truly manage inflation toward a constant 2% objective in such circumstances.
Our Methodology
We sifted through financial media reports to compile a list of stocks trading above $400 as of April 28 that could potentially split. We then selected the top stocks with large share price surges over the past 5 years and a history of stock splits. From that, we picked the top 10 stocks that were the most popular among elite hedge funds and that analysts were bullish on.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research shows we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 498.7% since May 2014, beating its benchmark by 303 percentage points (see more details here).
9. Ulta Beauty, Inc. (NASDAQ:ULTA)
Ulta Beauty, Inc. (NASDAQ:ULTA) ranks among the stocks to invest in before they split next. On April 20, Jefferies raised Ulta Beauty, Inc. to Buy from Hold and increased its price objective to $700 from $635. The firm stated that revenue resilience has grown as the beauty industry has expanded and makeup participation has increased.
Ulta Beauty, Inc. is better positioned to benefit from the cycle, thanks to improved brand novelty and retail execution, and its selling, general, and administrative expense expectations are now adjusted to a more reasonable level.
Jefferies claims that the stock exhibits skepticism and that a more attractive risk/reward profile is supported by modest margin improvement and better cost management.
Meanwhile, UBS kept its $810 price target and reaffirmed its Buy rating for Ulta Beauty, Inc. on April 17. The reaffirmation comes after the company’s stakeholder event, which UBS saw as an opportunity to assess the retailer’s position in the cosmetics ecosystem. According to UBS, the event showed how important the specialty retailer is to its network of stakeholders, which includes brands, influencers, workers, and consumers.
Ulta Beauty, Inc. is a specialty beauty retailer in the U.S. that operates more than 1,445 retail stores across 50 states. The company provides a variety of skincare, hair care, cosmetics, perfumes, and salon services.
8. KLA Corporation (NASDAQ:KLAC)
KLA Corporation (NASDAQ:KLAC) ranks among the stocks to invest in before they split next. On April 10, Wolfe Research increased its price target for KLA Corporation to $2,000 from $1,800 while keeping an Outperform rating on the company’s shares. The firm referenced KLA’s updated forecast at its Investor Day. The company raised its 2026 revenue guidance, predicting a high-teens percentage increase, implying revenue of around $15 billion vs $14.6 billion consensus projections.
The company also marginally raised its 2026 wafer manufacturing equipment forecast, now expecting $135 billion to $140 billion vs $135 billion previously. The new prediction is consistent with competitor Lam Research’s wafer manufacturing equipment estimate.
KeyBanc also reaffirmed its Sector Weight rating for KLA Corporation on April 8. According to the firm, KLA has a market share of over 56% in the Process Control industry, which is more than six times greater than that of its closest rival. The company’s dominance of the market has resulted in exceptional profits for shareholders, with the stock up 160% over the past year.
KLA Corporation provides process control, inspection, metrology, and yield management systems, which are critical to advanced semiconductor manufacturing.
7. MercadoLibre, Inc. (NASDAQ:MELI)
MercadoLibre, Inc. (NASDAQ:MELI) ranks among the stocks to invest in before they split next. On April 10, BTIG reaffirmed its Buy rating and $2,400 price target for MercadoLibre, Inc.. The firm adjusted its forecast to reflect revised margin estimates and recent macroeconomic variables such as foreign exchange rates, energy costs, and consumer spending.
BTIG’s full-year 2026 EPS projection declined less than 1% to $47.56 from $47.95, significantly below the average forecast of $53.41. The firm stated that the forecast is supported by lower expected foreign exchange losses since official Argentine peso exchange rates have aligned with grey market prices.
Meanwhile, on April 6, Jefferies raised MercadoLibre, Inc. to Buy from Hold, but reduced its price objective to $2,600 from $2,800. Analyst Alex Wright attributed the upgrade to Mercadolibre’s steady strategy and strong long-term track record of pursuing growth opportunities.
According to the firm, earnings downgrades due to lower margins have driven values to record absolute and comparative lows.
MercadoLibre, Inc. provides an online commerce platform and related services. It operates across four geographic segments: Brazil, Argentina, Mexico, and Other Countries.
6. Intuit Inc. (NASDAQ:INTU)
Intuit Inc. (NASDAQ:INTU) ranks among the stocks to invest in before they split next. On April 23, Deutsche Bank reaffirmed its Buy rating and $600 price target for Intuit Inc.. In partnership with dbDataInsights, the firm surveyed 745 taxpayers to compare tax preparation strategies utilized this year and the previous year.
According to the poll results, Intuit Inc. might meet or surpass its TurboTax segment guidance. After the results of the tax filing deadline are announced, Deutsche Bank will look into IRS filing trends and other sources of data in the upcoming weeks, noting that the poll is only a portion of the available data.
The results of the survey show modest share growth for TurboTax within the online tax prep category and for online tax preparation as a whole. Deutsche Bank stated that the potential for TurboTax share gains is an incremental improvement above the pre-tax season projections of a slight share loss. The high single-digit average revenue per return growth is consistent with the firm’s objectives.
Intuit Inc. provides financial management, payments & capital, compliance, and marketing products and services in the US. The company operates in four segments: Global Business Solutions, Consumer, Credit Karma, and ProTax.
5. Costco Wholesale Corporation (NASDAQ:COST)
Costco Wholesale Corporation (NASDAQ:COST) ranks among the stocks to invest in before they split next. Costco Wholesale Corporation has split its shares three times in its history: 2-for-1 in 1991, 3-for-2 in 1992, and 2-for-1 in 2000. Based on the current pricing, the market is speculating whether Costco Wholesale Corporation may split its stock in order to lower the price and attract more retail investors.
Niloo / Shutterstock.com
On April 16, Mizuho Financial Group boosted its price target for Costco Wholesale Corporation to $1,100 from $1,065 while keeping an Outperform rating, citing sustained operational performance. Costco’s fuel business has been a key driver of recent improvement, with March volumes increasing considerably.
Fuel sales, along with a roughly 20% increase in average selling prices, contributed approximately 250 basis points to U.S. comparable sales growth. If fuel costs remain high, this tailwind may continue into the coming quarters, leading to possible year-over-year price gains of 30% or more.
That said, the firm warned that adding low-margin gas revenues would likely reduce the composite gross margin rate by roughly 20 basis points, excluding membership fees, in line with previous examples. However, Mizuho added that the fuel trends do not affect its bullish outlook on the shares and advised investors to hold long.
A membership-based warehouse club, Costco Wholesale Corporation, offers bulk discounts on an array of products, including food, electronics, and household products.
4. Caterpillar Inc. (NYSE:CAT)
Caterpillar Inc. (NYSE:CAT) ranks among the stocks to invest in before they split next. Notably, Caterpillar Inc. has a history of rewarding shareholders through stock splits, having split its stock several times throughout the decades, the most recent in 2005.
On April 24, BofA Securities boosted Caterpillar Inc.’s price target to $930 from $825, maintaining a Buy rating on the company’s shares. According to analyst Michael Feniger, Caterpillar’s Power & Energy arm, which accounts for roughly 40% of revenues, is attracting substantial investor focus given its growth potential in the power sector, which includes engines and generators for data centers.
According to BofA Securities, there are indications that Caterpillar’s energy division may see growth in 2027. The firm stated that Caterpillar’s oil and gas portfolio might experience a comeback that year, albeit acknowledging some short-term risk to mining and excavation sales.
Meanwhile, on April 8, Freedom Broker boosted Caterpillar Inc.’s price objective to $710 from $700, retaining a Hold rating on the stock. Analyst Sergey Glinyanov stated that the firm remains favorable on Caterpillar Inc. going into 2026, adding that a recent conversation with management confirms the belief that the near-term environment may be more supportive than the market thinks.
Caterpillar Inc. is a leading global producer of heavy machinery, manufacturing equipment used in construction and mining, along with diesel and natural gas engines, industrial gas turbines, and diesel- electric locomotives.
3. Eli Lilly & Company (NYSE:LLY)
Eli Lilly & Company ranks among the stocks to invest in before they split next. Truist Securities restated its Buy rating and $1,281 price target for Eli Lilly & Company shares on April 17, following encouraging Phase 3 trial outcomes for Foundayo in type 2 diabetes. Eli Lilly & Company reported the results of ACHIEVE-4, a 52-week non-inferiority trial that evaluated Foundayo in over 2,700 type 2 diabetes patients from 15 countries. The trial met its primary goal, showing no inferiority to insulin glargine in terms of significant cardiovascular complications.
Compared to insulin glargine, Foundayo had a 57% decreased risk of all-cause death. According to Eli Lilly & Company, the Phase 3 program, which now consists of seven Phase 3 studies and over 11,000 patients, has not yet shown any liver safety indications for the medication.
By the end of the second quarter of 2026, the company intends to submit Foundayo for type 2 diabetes approval in the US. In order to assess an unexpected significant risk for major adverse cardiovascular events and drug-associated liver disease, the FDA has already asked for more post-marketing research.
Eli Lilly & Company is a major global pharmaceutical company that develops, manufactures, and distributes a wide range of drugs. Founded in 1876, it has grown to become one of the world’s largest pharmaceutical companies.
2. ASML Holding N.V. (NASDAQ:ASML)
ASML Holding N.V. (NASDAQ:ASML) ranks among the stocks to invest in before they split next. Following the Dutch chipmaker’s better-than-expected first-quarter results on April 15 and improved full-year outlook, Wall Street analysts increased their price estimates for ASML Holding N.V.. Both UBS and Deutsche Bank analysts reaffirmed their Buy ratings and increased their price targets from €1,500 to €1,600.
ASML Holding N.V. raised its fiscal 2026 revenue growth target to 10-22% year-over-year, rising from a previous range of 4-19%, citing higher-than-expected interest in immersion lithography equipment, particularly advanced logic and memory chipmakers.
The significance of the 2027 guidance was emphasized by Deutsche analyst Robert Sanders, who said it gave investors “confidence in the strong growth story.” Meanwhile, UBS, citing greater capacity from the next-generation EUV F platform coming that year, predicts 75 low-NA EUV shipments in 2027, slightly lower than what investors typically anticipate.
Looking forward, the analysts cited High NA EUV capabilities as another possible catalyst. They stated that orders for High-NA equipment would need to be placed in the latter half of 2026 to allow for installation by 2028 for large-scale production.
A key player in the semiconductor sector, ASML Holding N.V. specializes in lithographic systems that use light to etch intricate designs on silicon wafers, a crucial stage in chip production.
1. Meta Platforms, Inc. (NASDAQ:META)
Meta Platforms, Inc. (NASDAQ:META) ranks among the stocks to invest in before they split next. On April 23, Guggenheim reaffirmed its Buy rating and $850 price target for Meta Platforms, Inc., citing strong ad revenue growth and AI developments. Guggenheim anticipates revenue growth of more than 23% in each quarter through 2026, driven by performance enhancements, advertiser preference, and an increase in impressions on video platforms. The firm said that Meta’s 2026 capital expenditure projection of $115 billion to $135 billion implies a 73% increase over the previous year at the midpoint.
Meanwhile, on April 16, TD Cowen restated its Buy rating and $820 price target for Meta Platforms, Inc.. The firm anticipates increasing advertising growth, as well as reduced margins due to artificial intelligence spending. For Meta’s first-quarter 2026 revenue and operating income, TD Cowen’s projections are 1% and 6% higher than consensus, respectively.
According to TD Cowen, operating margins will contract due to increased AI spending, while revenue growth will accelerate in the fourth quarter due to AI-powered engagement and monetization benefits.
Meta Platforms, Inc. is a California-based company that develops social media applications, such as Facebook and Instagram. Dedicated to connecting people and growing businesses, the company has two segments: Family of Apps (FoA) and Reality Labs (RL).
