For more than two years, artificial intelligence (AI) has been the buzziest trend on Wall Street. The seemingly limitless ceiling associated with AI-driven software and systems has encouraged investors to pile into AI-fueled tech stocks.
But artificial intelligence isn't the only trend that investors have gravitated to recently. Excitement surrounding stock splits in some of Wall Street's most-influential businesses is another reason the market's major stock indexes achieved all-time highs in either late 2024 or early 2025.
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Investors are gravitating to a very specific type of stock split
A stock split is an event that allows a publicly traded company to superficially adjust its share price and outstanding share count by the same magnitude. The "superficial" aspect pertains to this action not impacting a company's market cap or underlying operating performance.
Although splits come in two forms -- forward and reverse -- they're viewed quite differently by the investing public.
Reverse splits are usually frowned upon by investors. This type of split, which is angled at increasing a company's share price, is almost always undertaken by struggling businesses that are attempting to avoid being delisted by a major U.S. stock exchange.
Conversely, forward stock splits are fewer and far between, but typically adored by investors. A forward split lowers a company's share price to make it more nominally affordable for investors who lack access to fractional-share purchasing through their broker. If a company has to reduce its share price to make it easier for retail investors to purchase whole shares, it's clearly doing something right.
Last year, more than a dozen leading businesses conducted a stock split, and all but one was of the forward variety. This included four prominent AI stocks, such as Nvidia, as well as a number of brand-name, consumer-facing businesses, like Chipotle Mexican Grill.
In 2025, only three high-profile forward stock splits have been announced. However, the biggest of these stock splits is official as of today, June 10.
Wall Street's biggest stock-split stock of the year is taking center stage
One of the odd quirks about stock splits is that being the first to announce your intent to perform a split doesn't mean you'll be the first company to officially do so.
Wholesale industrial and construction supplies company Fastenal(NASDAQ: FAST) was the last of the aforementioned three high-profile companies to announce its intention to conduct a forward split this year. However, it was the first of the three to complete its action, with a 2-for-1 split occurring after trading came to a close on May 21.
Fastenal splitting its stock is nothing new. In fact, it's become part of management's culture, with the May 21 forward split marking the ninth time in 37 years the company has made its shares more easily accessible to everyday investors.
While Fastenal has continually delivered over the long run by cementing itself as a key player in industrial supply chains, as well as through its innovation, it's not exactly a cheap stock at the moment. It's also not the biggest stock-split stock of 2025.
Prior to the opening bell on June 10, auto parts supplier O'Reilly Automotive(NASDAQ: ORLY) will have implemented a 15-for-1 forward split (the largest in the company's storied history). Instead of retail investors having to pony up $1,400 to purchase a single share of O'Reilly stock, it'll now cost a little over $90 per share.
Though O'Reilly announced its intention to split in mid-March, its board presented the measure for vote at the company's annual shareholder meeting in mid-May. This differs from Fastenal, which didn't put its stock-split measure up for vote.
Image source: Getty Images.
O'Reilly Automotive stock has skyrocketed more than 57,000% since its IPO
Since its initial public offering (IPO) in 1993, shares of O'Reilly Automotive have vaulted higher by more than 57,000%! These gains didn't occur by accident, and by no means does this supercharged return mark a top for the company's stock. Rather, O'Reilly Automotive appears to be hitting its stride.
One of the reasons shares have skyrocketed is because drivers are hanging onto their vehicles longer than ever before. In the latest annual report from S&P Global Mobility, a division of the well-known S&P Global, the average age of cars and light trucks on U.S. roadways increased to an all-time high of 12.8 years. This is up from an average age of 11.1 years in 2012.
To add further context, the average interest rate for a 60-month auto loan for a new vehicle purchase has effectively doubled since late 2021. With the cost for a new vehicle rapidly rising, drivers and businesses are incented to hang onto what they already own. This is fantastic news for O'Reilly and its peers, which are being tasked with keeping aging vehicles running in tip-top condition.
But there are company-specific variables at play, too.
For instance, O'Reilly's hub-and-spoke distribution model is meeting the needs of drivers and mechanics across the country. The company's 31 distribution centers are surrounded by nearly 400 hub stores that can get more than 153,000 stock keeping units (SKUs) to customers on a same-day or overnight basis. This ensures that virtually all parts or accessories are within reach, as well as keeps customers and mechanics loyal to the brand.
O'Reilly Automotive's board has also taken a page out of rival AutoZone's book and implemented one of Wall Street's leading share-repurchase programs. Since kicking off its buyback initiative in 2011, O'Reilly has spent more than $25.9 billion to retire approximately 59.4% of its outstanding shares.
When a company is delivering record sales and profits year after year, a declining outstanding share count all but ensures that buybacks are boosting earnings per share. In other words, this aggressive repurchase program is making its stock more fundamentally attractive to value investors.
While O'Reilly's forward price-to-earnings ratio of 27 is toward the higher end of its historic range, the persistent aging of America's vehicles, the nimbleness of the company's supply chain, and its ongoing buyback program, all suggest shares can head notably higher over the long run.
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Sean Williams has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Chipotle Mexican Grill, Nvidia, and S&P Global. The Motley Fool recommends the following options: short June 2025 $55 calls on Chipotle Mexican Grill. The Motley Fool has a disclosure policy.
