Everyone is asking the same question. It’s the elephant in the room every time Microsoft reports earnings. Will Microsoft stock split this year, or are we just going to keep watching that share price climb until it hits $1,000?
Honestly, the anticipation is getting a bit ridiculous.
Microsoft hasn't split its stock since February 2003. That is over two decades of standing still while peers like Nvidia, Alphabet, and Amazon have sliced their shares multiple times to keep them "affordable." If you bought MSFT back during that last 2-for-1 split in 2003, you’ve watched your investment gain nearly 2,000%. But for everyone else looking to jump in today at roughly $450 to $500 a share, the entry price feels a bit steep.
The Dow Jones Dilemma Nobody Talks About
There is a very specific reason Microsoft might be forced into a split, and it has nothing to do with helping retail investors buy "whole" shares.
Microsoft is a heavyweight in the Dow Jones Industrial Average. Unlike the S&P 500, which is weighted by market cap (how big the company is), the Dow is price-weighted.
This basically means the more expensive a stock's sticker price, the more influence it has over the entire index. Right now, Microsoft is one of the most expensive components in the Dow, trailing only names like Goldman Sachs and UnitedHealth. If Satya Nadella lets the price run much higher—say, toward $600—it starts to "break" the index by having too much power over the Dow's daily moves.
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"Microsoft is the third-largest component in the Dow Jones... This could trigger Microsoft to announce a stock split so that it isn't forced to do it at a time it may not want to." — Keithen Drury, Financial Analyst.
It’s a weird bit of leverage. If Microsoft wants to stay in the world's most famous index without skewing the results, they kinda have to keep their price in line with the other 29 companies.
Why 2026 is Different for MSFT
The AI revolution changed the math. Before 2023, Microsoft was a "slow and steady" cloud play. Now, it’s the backbone of the generative AI world through its massive investment in OpenAI—a stake currently valued around $203 billion.
Azure, their cloud platform, is growing at a clip that's frankly terrifying for competitors. In the first quarter of fiscal 2026, Azure revenue jumped 40%. When you're a $3.4 trillion company and you're growing a core segment by 40%, the stock price tends to follow.
Analysts at firms like Wedbush and Wells Fargo have set price targets as high as $665 for 2026. If we hit those numbers, a split becomes almost inevitable. You can't have a $700 stock sitting in a price-weighted index alongside a $50 stock. It just doesn't work.
The Psychological Barrier
Let’s be real: stock splits don’t actually change the value of your investment.
If you have one $500 bill and I swap it for five $100 bills, you aren't richer. But in the stock market, perception is reality. A lower price tag invites the "Robinhood crowd" and makes selling covered calls—an options strategy that requires owning 100 shares—much more accessible for the average person.
Right now, to trade a single standard options contract on Microsoft, you need nearly $46,000 in capital. That’s a massive barrier. A 10-for-1 split would drop that requirement to $4,600. That alone would flood the stock with new liquidity.
The History of the "Big Nine"
Microsoft isn't new to this. They've done it nine times before.
- 1987: 2-for-1
- 1990: 2-for-1
- 1991: 1.5-for-1
- 1992: 1.5-for-1
- 1994: 2-for-1
- 1996: 2-for-1
- 1998: 2-for-1
- 1999: 2-for-1
- 2003: 2-for-1
Notice a pattern? In the 90s, they were splitting almost every other year. Then, the dot-com bubble burst, Steve Ballmer took over, and the stock went sideways for a decade. Under Satya Nadella, the growth returned, but the "split-happy" culture didn't.
What to Watch for on January 28
The next big date is January 28, 2026. This is when Microsoft reports its next set of earnings.
While the company hasn't breathed a word about a split in its official filings yet, management knows the pressure is mounting. If they report another blowout quarter driven by AI and Azure, the stock could easily pop toward all-time highs.
Some skeptics point to "fractional shares" as the reason splits are dead. Most brokers let you buy $5 worth of Microsoft now, so why bother splitting? But as mentioned before, the Dow Jones weighting and the options market don't care about your fractional shares. They care about the nominal price.
Is the AI Hype Fading?
We have to acknowledge the bear case. The stock has seen some volatility lately, dropping about 16% from its recent peaks. Some investors are worried that the $80 billion Microsoft is pouring into data centers and AI chips won't pay off fast enough.
If the stock price stagnates or falls back toward $400, the urgency for a split disappears. Management usually likes to split from a position of strength, not as a gimmick to prop up a falling price.
Actionable Steps for Investors
If you’re holding out for a split before buying, you might be waiting for a bus that isn't coming. Here is how to actually play the will microsoft stock split uncertainty:
- Don't wait for the split to buy. Historically, stocks often run up before a split is actually executed because of the excitement. If you like the company's 16% projected revenue growth for 2026, buy based on the fundamentals, not the share count.
- Use Fractional Shares. If the $450+ price tag is too high for your budget, use a broker like Fidelity or Schwab that allows fractional trading. You get the same percentage gains without needing the full capital upfront.
- Monitor the Dow Jones. Keep an eye on Goldman Sachs (GS) and UnitedHealth (UNH). If those companies split first, Microsoft becomes the "problem child" of the index with the highest price, making their split much more likely.
- Watch the $600 level. This seems to be the psychological "trigger" point. If MSFT clears $600 and stays there, expect a split announcement within the following two quarters.
The reality is that Microsoft doesn't need to split, but the market wants it to. Between the pressure of the Dow Jones and the accessibility of the options market, the case for a 2026 split is the strongest it has been in twenty years.