Although the rise of artificial intelligence (AI) has been Wall Street's hottest trend for the better part of four years, don't overlook the role stock-split euphoria has played in boosting investor optimism and lifting the broader market.
Several high-profile companies have completed stock splits this year, including AI-driven cybersecurity solutions provider CrowdStrike Holdings and online travel giant Booking Holdings. But on Wednesday, July 8, arguably the highest-flying non-tech company on Wall Street threw its proverbial hat in the ring to become the newest blockbuster stock split: Monster Beverage (MNST +0.06%).
Image source: Getty Images.
Stock splits come in two varieties
A stock split is an event that allows a company (even private companies) to superficially adjust their share price and outstanding share count. These changes are purely cosmetic in the sense that they don't alter a company's market cap or its operating performance.
Stock splits come in two forms, with investors flocking to one and generally avoiding the other.
Reverse splits are effectively the black sheep of Wall Street. A reverse split is designed to increase a company's share price while concurrently lowering the number of outstanding shares. This type of split is often completed by struggling businesses trying to avoid delisting from a major stock exchange.
NASDAQ: MNST
Key Data Points
Meanwhile, investors typically gravitate to forward stock splits, which reduce a company's share price to make it more nominally affordable for retail investors who can't purchase fractional shares through their broker. If a company has to lower its share price to ensure ongoing retail investor participation, it's often doing something right.
Energy-drink behemoth Monster Beverage announced a 2-for-1 forward split that'll go into effect after the close of trading on Aug. 10. It represents the sixth time Monster has undertaken a forward split since its initial public offering (IPO).
Image source: Getty Images.
Monster has lived up to its name
Shares of Monster Beverage have skyrocketed approximately 457,000% since its IPO -- and gains of this magnitude don't happen by accident.
Easily the biggest tailwind for Monster has been its close-knit ties with Coca-Cola (KO +0.79%). In the summer of 2014, Coca-Cola agreed to take a 16.7% stake in Monster and transfer its energy drink operations, including NOS and Burn, to the company.
In return, Monster transferred its non-energy operations to Coke and gained access to Coca-Cola's leading global distribution network. It's been an enormous win for both parties, with Coca-Cola's stake in Monster growing to around 20%, and Monster expanding its reach around the globe.
Monster Beverage is the top-performing stock in past 30 years.
-- Trung Phan (@TrungTPhan) February 18, 2024
A $1,000 investment in 1994 would be worth $2,000,000 today (+200,000% gain).
Its partnership with Coca-Cola has been so smart:
▫️In 2015, Coca-Cola bought a 16.67% stake for $2B
▫️They swapped drink portfolios:... pic.twitter.com/wNXb2UFW71
Monster's innovation has also powered its shares higher. In addition to solidifying its position as No. 2 in domestic energy drink market share, Monster has introduced several zero-sugar energy drinks and broadened its reach into the alcohol and coffee arenas. Net sales jumped 11% in 2025, marking its 33rd consecutive year of positive net sales growth.
Although Monster Beverage's shares aren't particularly cheap at 37 times forward-year earnings, there aren't too many non-tech stocks that have been consistently delivering double-digit sales growth spanning more than three decades. The company's brand power and share buyback program give it a real chance to push even higher.
