CRUSHING

Though artificial intelligence has been the hottest trend on Wall Street, it’s far from the only catalyst responsible for sending the benchmark S&P 500 (^GSPC -0.13%) to new heights. Investor excitement surrounding stock splits in high-profile businesses has played a close second fiddle.

A stock split allows a publicly traded company to cosmetically adjust its share price and outstanding share count by the same factor. These changes are “cosmetic” in the sense that they don’t impact a company’s market cap or its operating performance.

Image source: Getty Images.

Typically, investors keep their distance from businesses enacting reverse splits and gravitate to those announcing and completing forward splits. The latter is designed to lower a company’s share price to make it more nominally affordable for retail investors who can’t buy fractional shares through their broker. Companies that complete forward splits are usually out-innovating and out-executing their competition.

As of the closing bell on Sept. 12, three magnificent businesses had announced and completed forward splits this year. Whereas the benchmark S&P 500 has risen by roughly 12% on a year-to-date (YTD) basis, Wall Street’s trio of stock-split stocks has crushed it!

O’Reilly Automotive: up 36% YTD

Though it wasn’t the first to complete its split, auto parts supplier O’Reilly Automotive (ORLY -0.85%) kicked off stock-split euphoria in 2025 by announcing its intent to conduct a 15-for-1 forward split in mid-March. O’Reilly sought shareholder approval for its largest-ever stock split and was granted it, which paved the way for its split taking effect before the opening bell on June 10.

While shares of the company have jumped 36% on a year-to-date basis, they’re up closer to 67,000% since its initial public offering (IPO) in 1993.

O’Reilly Automotive has a few important tailwinds working in its favor. On a macro basis, S&P Global Mobility recently reported that the average age of vehicles on U.S. roadways jumped to 12.8 years in 2025. For context, this is up from an average of 11.1 years in 2012. With consumers hanging onto their cars and light trucks longer than ever before, they and their mechanics will be turning to auto parts retailers like O’Reilly to keep these vehicles in tip-top shape.

Additionally, O’Reilly has reworked its distribution system to ensure that drivers and mechanics have access to the parts they need. O’Reilly entered the year with 31 distribution centers and close to 400 hub stores. These hub stores feed from the distribution centers and ensure that outlying retail locations have access to more than 153,000 stock keeping units (SKUs) delivered same-day or on an overnight basis.

From an investment standpoint, O’Reilly’s greatest gift might just be its stellar capital-return program. Since initiating a share repurchase program in January 2011, O’Reilly has spent $26.6 billion to buy back almost 60% of its outstanding shares. For companies with steady or growing net income, buybacks can provide a big boost to earnings per share (EPS).

Image source: Getty Images.

Fastenal: up 32% YTD

A second stock-split stock that’s come close to tripling the year-to-date return of the broad-based S&P 500 is wholesale industrial and construction supplies company Fastenal (FAST -1.07%). Shares are up 32% YTD, but more than 150,000% since its August 1987 IPO.

Stock splits might as well be part of Fastenal’s corporate culture. The 2-for-1 split that was announced in April and effected prior to the start of trading on May 22 marked the ninth time in 37 years Fastenal had completed a split.

Fastenal is a company that benefits immensely from the disproportionate nature of economic cycles. This is to say that while economic downturns are normal, healthy, and inevitable, they tend to be short-lived. The average economic expansion since the end of World War II has stuck around five years, which is fantastic news for a company whose growth tends to ebb-and-flow with the health of the U.S. economy and cyclical industries.

Fastenal’s ongoing success is also reflective of its closeknit ties to its most-promising clients. During the second quarter, more than 73% of its net revenue traced back to contract sales, which are multisite, local, regional, and government customers that offer significant revenue potential. Being able to place its inventory solutions on-site helps integrate Fastenal’s products into the supply chains of its most important customers.

Lastly, innovation has been key to Fastenal’s six-digit percentage rally since its debut. The company’s managed inventory solutions, such as its internet-connected wireless vending machines and inventory tracking bins, help its clients save money and ensures that Fastenal has a good bead on the supply chain needs of its customers.

Interactive Brokers Group: up 44% YTD

However, the top-performer among stock-split stocks in 2025 is automated electronic brokerage firm Interactive Brokers Group (IBKR 0.45%), which has rallied 44% YTD and 438% over the trailing half-decade.

Unlike O’Reilly Automotive and Fastenal, Interactive Brokers made history when it completed a 4-for-1 forward split before the opening bell on June 18. This marked its first split since becoming a public company in May 2007.

One of the top tailwinds for Interactive Brokers Group is the stock market being in an uptrend. When the S&P 500 is hitting new highs, investors have a tendency to want in on the action. This typically means trading more, adding more money to the platform, and potentially using margin. Bull markets for the S&P 500 often create an excellent operating environment for Interactive Brokers.

Another factor fueling this outperformance is the company’s investments in technology and automation. Though these investments came at a cost, they’re allowing Interactive Brokers to offer higher interest rates to customers on cash kept in their accounts, as well as lower borrowing rates for margin. These are attractive perks that are clearly resonating with investors.

The final piece of the puzzle is that every meaningful key performance indicator for Interactive Brokers is pointing significantly higher. During the June-ended quarter, customer accounts and customer equity on the platform jumped 32% and 34%, respectively, with daily active revenue trades (a measure of trading activity on the platform) climbing 49%! It’s not hard to see why Interactive Brokers Group is leading the way in 2025.

The crew had just poured a concrete foundation on a vacant lot in Altadena when I pulled up the other day. Two workers were loading equipment onto trucks and a third was hosing the fresh cement that will sit under a new house.

I asked how things were going, and if there were any problems finding enough workers because of ongoing immigration raids.

“Oh, yeah,” said one worker, shaking his head. “Everybody’s worried.”

The other said that when fresh concrete is poured on a job this big, you need a crew of 10 or more, but that’s been hard to come by.

“We’re still working,” he said. “But as you can see, it’s just going very slowly.”

Eight months after thousands of homes were destroyed by wildfires, Altadena is still a ways off from any major rebuilding, and so is Pacific Palisades. But immigration raids have hammered the California economy, including the construction industry. And the U.S. Supreme Court’s ruling this week that green-lights racial profiling has raised new fears that “deportations will deplete the construction workforce,” as the UCLA Anderson Forecast warned us in March.

There was already a labor shortage in the construction industry, in which 25% to 40% of workers are immigrants, by various estimates. As deportations slow construction, and tariffs and trade wars make supplies scarcer and more expensive, the housing shortage becomes an even deeper crisis.

And it’s not just deportations that matter, but the threat of them, says Jerry Nickelsburg, senior economist at the Anderson Forecast. If undocumented people are afraid to show up to install drywall, Nickelsburg told me, it “means you finish homes much more slowly, and that means fewer people are employed.”

Now look, I’m no economist, but it seems to me that after President Trump promised the entire country we were headed for a “golden age” of American prosperity, it might not have been in his best interest to stifle the state with the largest economy in the nation.

Especially when many national economic indicators aren’t exactly rosy, when we have not seen the promised decrease in the price of groceries and consumer goods, and when the labor statistics were so embarrassing he fired the head of the Bureau of Labor Statistics and replaced her with another one, only to see more grim jobs numbers a month later.

I had just one economics class in college, but I don’t recall a section on the value of deporting construction workers, car washers, elder-care workers, housekeepers, nannies, gardeners and other people whose only crime — unlike the violent offenders we were allegedly going to round up — is a desire to show up for work.

Now here, let me give you my email address. It’s [email protected].

And why am I telling you that?

Because I know from experience that some of you are frothing, foaming and itching to reach out and tell me that illegal means illegal.

So go ahead and email me if you must, but here’s my response:

We’ve been living a lie for decades.

People come across the border because we want them to. We all but beg them to. And by we, I mean any number of industries — many of them led by conservatives and by Trump supporters — including agribusiness, and hospitality, and construction, and healthcare.

Why do you think so many employers avoid using the federal E-Verify system to weed out undocumented workers? Because they don’t want to admit that many of their employees are undocumented.

In Texas, Republican lawmakers can’t stop demonizing immigrants, and they can’t stop introducing bills by the dozens to mandate wider use of E-Verify. But the most recent one, like all the ones before it, just died.

Why?

Because the tough talk is a lie and there’s no longer any shame in hypocrisy. It’s a climate of corruption in which no one has the integrity to admit what’s clear — that the Texas economy is propped up in part by an undocumented workforce.

At least in California, six Republican lawmakers all but begged Trump in June to ease up on the raids, which were affecting business on farms and construction sites and in restaurants and hotels. Please do some honest work on immigration reform instead, they pleaded, so we can fill our labor needs in a more practical and humane way.

Makes sense, but politically, it doesn’t play as well as TV ads recruiting ICE commandos to storm the streets and arrest tamale vendors, even as the barbarians who ransacked the Capitol and beat up cops enjoy their time as presidentially pardoned patriots.

Small businesses, restaurants and mom and pops are being particularly hard hit, says Maria Salinas, chief executive of the Los Angeles Area Chamber of Commerce. Those who survived the pandemic were then kneecapped again by the raids.

With the Supreme Court ruling, Salinas told me, “I think there’s a lot of fear that this is going to come back harder than before.”

From a broader economic perspective, the mass deportations make no sense, especially when it’s clear that the vast majority of people targeted are not the violent criminals Trump keeps talking about.

Giovanni Peri, director of the UC Davis Global Migration Center, noted that we’re in the midst of a demographic transformation, much like that of Japan, which is dealing with the challenges of an aging population and restrictive immigration policies.

“We’ll lose almost a million working-age Americans every year in the next decade just because of aging,” Peri told me. “We will have a very large elderly population and that will demand a lot of services in … home healthcare [and other industries], but there will be fewer and fewer workers to do these types of jobs.”

Dowell Myers, a USC demographer, has been studying these trends for years.

“The numbers are simple and easy to read,” Myers said. Each year, the worker-to-retiree ratio decreases, and it will continue to do so. This means we’re headed for a critical shortage of working people who pay into Social Security and Medicare even as the number of retirees balloons.

If we truly wanted to stop immigration, Myers said, we should “send all ICE workers to the border. But if you take people who have been here 10 and 20 years and uproot them, there’s an extreme social cost and also an economic cost.”

At the Pasadena Home Depot, where day laborers still gather despite the risk of raids, three men held out hope for work. Two of them told me they have legal status. “But there’s very little work,” said Gavino Dominguez.

The third one, who said he’s undocumented, left to circle the parking lot and offer his services to contractors.

Umberto Andrade, a general contractor, was loading concrete and other supplies into his truck. He told me he lost one fearful employee for a week, and another for two weeks. They came back because they’re desperate and need to pay their bills.

“The housing shortage in California was already terrible before the fires, and now it’s 10 times worse,” said real estate agent Brock Harris, who represents a developer whose Altadena rebuilding project was temporarily slowed after a visit from ICE agents in June.

With building permits beginning to flow, Harris said, “for these guys to slow down or shut down job sites is more than infuriating. You’re going to see fewer people willing to start a project.”

Most people on a job site have legal status, Harris said, “but if shovels never hit the ground, the costs are being borne by everybody, and it’s slowing the rebuilding of L.A.”

Lots of bumps on the road to the golden age of prosperity.

[email protected]

The Buenos Aires provincial election is a test of Milei’s popularity ahead of upcoming congressional polls next month.

The party of Argentina’s libertarian president, Javier Milei, has suffered a crushing defeat in local elections in the capital, Buenos Aires, even before he completes two years in office, in the most significant act of frustration with his deep-cutting economic austerity policies.

The results, announced on Sunday, put the candidate for Milei’s recently formed La Libertad Avanza (LLA) party, or Liberty Advances, Diego Valenzuela, who captured 34 percent, far behind Gabriel Katopodis, the Peronist left-wing challenger who received 47.4 percent.

LLA won just two of the eight electoral districts of the Buenos Aires province.

Milei conceded that his right-wing party’s crushing 13-point loss to his rivals represented “a clear defeat”.

“We suffered a setback, and we must accept it responsibly,” he said after the results came in. “If we’ve made political mistakes, we’re going to internalise them, we’re going to process them, we’re going to modify our actions,” he added.

In a post on X, Argentina’s former Peronist president, Cristina Kirchner, said, “Did you see Milei? … Get out of your bubble, brother … things are getting heavy.”

However, the 54-year-old economist pledged not to retreat “1 millimetre” from his agenda to aggressively roll back the Argentinian state and cut public spending. “We will deepen and accelerate it,” he said.

The election for the leadership of Argentina’s wealthiest province is viewed as a litmus test for Milei’s so-called “chainsaw” measures, as 40 percent of the country’s population lives in Buenos Aires, and it accounts for a third of the country’s gross domestic product (GDP).

Argentina will go to the polls at the end of October for congressional midterms, which will be a crucial test of deep political support, with half of the seats in Argentina’s lower house up for grabs and a third of its senate.

Congress is already dominated by opposition parties, and the defeat in Buenos Aires will represent a blow to Milei’s hopes of expanding his influence.

Unemployment figures in Argentina are currently at their highest since 2021, during the COVID pandemic, and Milei’s government has also been caught in a corruption scandal linked to his sister and close aides.

Argentina also saw widespread protests after Milei vetoed a bill aimed at increasing pensions and disability spending. Congress later overturned his veto.

The governor of the southern Chubut province, Nacho Torres, said the vote was a “wake-up call from the citizenry”, while the governor of the northeastern Santa Fe province said voters were giving a “clear warning” to Milei. “People no longer want more shouting; they want facts. We Argentines want to grow and develop with security and in peace,” he added.

The S&P 500 has risen about 10% this year and is hovering near its all-time highs. That rally was largely driven by the tech sector’s robust growth rates, big buybacks, earnings beats across the market, easing trade tensions, and hopes for deeper interest rate cuts. But with a price-to-earnings ratio of 30, the S&P 500 also looks historically expensive. However, some of the S&P 500’s top stocks are outperforming the benchmark index by a wide margin but still trading at reasonable valuations.

One of those stocks is Meta Platforms (META -1.69%), the parent company of Facebook, Instagram, Messenger, and WhatsApp. Meta’s stock has rallied nearly 30% year to date but trades at just 27 times its trailing earnings. Let’s see why it crushed the market — and why it might soar even higher through the end of 2025.

Image source: Getty Images.

The world’s biggest social media company keeps growing

Meta is the world’s largest social media company. It served 3.48 billion daily active people (DAP) across its entire family of apps in the second quarter of 2025. That’s nearly two-thirds of the world’s adult population. But over the past year, Meta still gained new users, increased its total ad impressions, and raised its ad prices.

Data source: Meta Platforms. YOY = Year-over-year.

That growth was driven by its new artificial intelligence (AI)-powered algorithms and ad targeting systems, which attracted more users and monetized them more effectively. Those upgrades countered Apple‘s privacy changes on iOS, which throttled its ad sales three years ago. Meta’s short-video platform, Reels, kept pace with ByteDance’s TikTok and locked more users into Facebook and Instagram. It’s also been rolling out more ads on Threads, which is gradually gaining momentum against X in the microblogging market.

Since Meta reaches so many users and holds a near duopoly in the digital advertising market with Alphabet‘s Google, it yields tremendous pricing power. That advertising ecosystem also serves as a firm foundation for building new products and services.

Its margins are expanding, and its profits are soaring

Meta continues to subsidize the expansion of its unprofitable Reality Labs segment (which creates its virtual and augmented reality products) with its higher-margin ad sales as it ramps up its investments in its own AI infrastructure. Yet its operating margins still expanded at a healthy clip over the past year as its earnings per share (EPS) grew by the high double digits.

Data source: Meta Platforms. YOY = Year-over-year.

That robust earnings growth can be attributed to Meta’s surging sales of AI-driven ads, its higher ad prices, its prior workforce reductions (especially in 2023 as it weathered Apple’s iOS changes), the classification of its cloud and data-center costs as capital expenditures (instead of immediate operating expenses), and its ongoing buybacks.

Simply put, Meta can afford to keep pouring its cash into unprofitable or loss-leading projects to expand its ecosystem. While many of those projects might flop, some of them might stick and strengthen Meta’s defenses against Google and its other AI-driven competitors.

Why will Meta’s stock rally through the end of the year?

For 2025, analysts expect Meta’s revenue and EPS to grow 19% and 18%, respectively. From 2024 to 2027, they expect Meta’s revenue and EPS to rise at a compound annual growth rate (CAGR) of 16% and 13%, respectively. It doesn’t look expensive relative to those growth rates, and it could command a higher valuation if the trade tensions wane and the Fed cuts its benchmark rates again. Assuming Meta matches analysts’ expectations and trades at a slightly more generous 30 times forward earnings by the end of 2025, its stock price would rise about 20% to nearly $900. That’s why I expect Meta to keep outperforming the S&P 500 through the end of the year.