In the pandemic era, many American technology companies enjoyed spectacular bull runs driven by impressive revenue and profit growth. But while this was great news for investors, it made their stocks expensive on a per-share basis and appeared to put them out of reach for new money. Stock splits solve this problem by dividing each share into several lower-priced units to reduce the company's stock price without changing its market cap -- the value of all its shares combined.

In 2022,  (NASDAQ: TSLA) and Amazon (NASDAQ: AMZN) used this technique to make their shares more appealing to small investors. Both companies can continue to grow because of their solid fundamentals.

Since its IPO in 2010, Tesla has delivered explosive stock price growth, with management relying on stock splits (most recently, a 3-for-1 conversion in 2022) to keep its stock easily accessible to those smaller investors who don't have access to fractional share purchases. And while the electric vehicle (EV) maker faces challenges from competition and recently weakening consumer demand, its long-term thesis remains strong. 

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Source Fool.com