Stock-Split History Is Being Made Next Week by an Industry-Leading Company That's Gained 400% in Just Over 5 Years

• Investors have rallied around influential companies conducting splits.

• To date, two industrial titans -- one of which has risen more than 210,000% since its initial public offering -- have completed forward stock splits.

• Next week, a high-flying financial stock, whose key performance indicators are rocketing higher across the board, will become Wall Street's newest stock-split stock.

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For more than three decades, investors have almost always had a next-big-thing trend or innovation to hold their attention. It started with the advent and proliferation of the internet in the mid-1990s and was followed by genome decoding, business-to-business e-commerce, nanotechnology, 3D printing, blockchain technology, cannabis, and the metaverse. Today, artificial intelligence (AI) is captivating the attention and wallets of professional and everyday investors.

But every so often, more than one big trend can exist at the same time. In addition to the evolution of AI, investors have been rallying around influential companies announcing stock splits.

A stock split is a tool publicly traded companies can lean on to cosmetically alter their share price and outstanding share count by the same factor. These adjustments are considered cosmetic because they don't result in a change to a company's market cap or its underlying operating performance.

Although stock splits can nominally adjust a company's share price in either direction, one is overwhelmingly preferred by the investing community.

Reverse splits, which are designed to increase a company's share price while correspondingly reducing its outstanding share count, are often avoided by investors. The companies announcing and completing reverse splits are typically struggling and attempting to avoid delisting from a major U.S. stock exchange.

On the other hand, investors are willingly lured by businesses conducting forward splits. This type of split lowers a company's share price to make it more nominally affordable for everyday investors and/or employees who aren't able to purchase fractional shares. Forward splits are typically completed by companies on the leading edge of the innovation curve within their respective industry.

Furthermore, an analysis from Bank of America Global Research showed that, since 1980, companies enacting forward splits more than doubled the average return of the benchmark S&P 500 in the 12 months following their split announcement (25.4% vs. 11.9%).