In a move that signals the extent of this year's bull run, Chipotle Mexican Grill Inc. has proposed a 50-for-1 stock split, aiming to make its shares more affordable for a wider range of investors. The split, if approved by shareholders at the annual meeting on June 6, will be one of the largest ever on the New York Stock Exchange.

The stock split, which does not impact the company's fundamentals, caused excitement in the market. Chipotle shares rallied to fresh highs, adding to the stock's record-breaking run that has seen it surge over 26% this year.

According to Howard Silverblatt, a senior index analyst at S&P Dow Jones Indices, this 50-for-1 stock split is highly unusual and unprecedented in size. Splitting shares is typically pursued by companies for perception reasons, such as making the stock more accessible to retail investors.

Stock splits have fallen out of favor in recent times due to the popularity of buying fractional shares. In 2024, only four companies in the S&P 500 executed stock splits. However, as stock markets continue to soar, companies are realizing the optics problem posed by high share prices and the potential to attract more demand from retail customers with lower-priced stocks.

Chipotle's proposal to split its stock is driven by the desire to create accessibility for employees and a broader pool of investors. With shares currently priced at nearly $2,900, the fast-food chain aims to bring the stock down to approximately $60 per share after the split, making it more affordable for potential buyers.

This year, two S&P 500 companies, Cooper Cos. Inc. and Walmart Inc., implemented stock splits with similar intentions. These splits not only reduce share-price sticker shock but also have the potential to increase liquidity and demand for the stock.

Chipotle's split announcement garnered attention due to its size. Excluding a few larger splits associated with share offerings, the fast-food chain's split is tied with Berkshire Hathaway's as one of the largest in history.

Market participants now speculate that Nvidia Corp., a market-leading artificial intelligence company, may be the next candidate for a stock split. With its stock up around 90% this year, Nvidia's share price is still over $900, prompting suggestions that a split could help drive individual participation among retail investors.

While the future of stock splits remains uncertain, the move by Chipotle and other companies highlights the growing consideration of making stocks more accessible and attractive to a wider investor base.

In conclusion, Chipotle's historic 50-for-1 stock split proposal aims to bring its shares within reach of more investors by reducing their price. If approved, the split will mark one of the largest stock splits on the NYSE and could potentially pave the way for more companies to reconsider this approach in the future.