How Meta Platforms Could Deliver Significant Returns: Why AI Revenue Matters More Than Stock Splits

Why Investors Shouldn’t Obsess Over Stock Splits

Many investors get excited about stock splits, but here’s the reality: a stock split is largely a cosmetic event. If you own 10 shares worth $660 each ($6,600 total) and the company executes a 2-for-1 split, you’d end up with 20 shares at $330 each — still totaling $6,600. The math doesn’t create wealth; what matters is the underlying business performance.

While Meta Platforms (NASDAQ: META) could potentially undergo a stock split at some point, that’s actually the least interesting aspect of this social media and communications giant. What deserves your attention is the company’s actual fundamentals and growth trajectory.

The Real Story: AI Revenue Generation

Meta Platforms, the parent company of Facebook, Instagram, Messenger, and WhatsApp, has evolved into a $1.7 trillion enterprise. More importantly, the company is generating substantial returns from its artificial intelligence investments — a competitive advantage that many investors overlook.

Unlike some tech firms that are still ramping up AI spending without clear monetization, Meta is already capturing significant revenue from its AI initiatives. This positions the company differently from pure-play AI developers. The company’s heavy investments in artificial intelligence are beginning to pay tangible dividends, demonstrating that the technology can drive real business results.

Attractive Valuation Despite Strong Growth

The financial metrics paint an encouraging picture. Over the past three years, Meta has delivered an average annual return of 77%, yet the stock trades at a forward price-to-earnings (P/E) ratio of just 20 — quite reasonable for a company still expanding rapidly. Compare this to other growth-stage technology firms, and the valuation becomes even more compelling.

In the third quarter alone, Meta reported 26% year-over-year revenue growth combined with an 18% increase in operating income. These aren’t mature, slow-growth numbers; this is a company in expansion mode while maintaining profitability. Over the past decade, annualized returns have averaged 20%.

Additional Income and Future Potential

Meta also pays shareholders dividends, with a yield of 0.3%. While modest in isolation, this payout reflects the company’s confidence in its cash generation. Given Meta’s rapid expansion and strong profit margins, the dividend could expand considerably over time as the business continues to mature.

The Bottom Line

When evaluating Meta Platforms as a potential investment, focus on what actually creates wealth: a company with competitive advantages, proven revenue generation from emerging technologies like AI, reasonable valuation metrics, and consistent growth. A possible future stock split is noise by comparison.

The real question isn’t whether a stock split might happen — it’s whether the company’s underlying business can continue delivering returns. Based on Meta’s AI momentum, valuation, and profitability, the case appears compelling for long-term investors willing to hold through market cycles.