3 Growth Stocks to Buy in January That Could Issue Stock Splits in 2026

ASML, AppLovin and Tesla have been notable 2025 performers — ASML +54%, AppLovin +125% and Tesla +20% — and each is cited as a likely stock-split candidate in 2026. ASML, the sole maker of EUV lithography systems, is trading above $1,000 with a P/E around 36x and management guiding 7.6%–13.3% annualized revenue growth through 2030 amid AI-driven demand despite prior US–China export tensions. AppLovin reported revenue up 68% to $1.4 billion last quarter, trades north of $700 and sits at ~78x forward earnings as mobile ad-tech TAM forecasts look large, while Tesla trades near $500 with a ~300x P/E as the company pushes into humanoid robotics (Optimus) against slowing vehicle sales.

Analysis

Market structure: ASML is the clear winner — near-monopoly on EUV gives multi-year pricing power and a backlog-driven supply shortage likely to persist 12–24 months, directly benefitting foundries (TSMC, Samsung) and select materials/metrology suppliers while hurting legacy nodes and any OEMs reliant on older lithography. AppLovin benefits from secular mobile ad-tech growth and higher ARPU, but its business is much more cyclically tied to ad budgets than ASML’s capex-driven cadence. Tesla’s robotics narrative is buoying sentiment, not cash flow, and reallocates equity risk from cyclic automotive demand to long-duration optionality.

Risk assessment: Key tail risks include tightened export controls to China that could cut ASML’s addressable revenue by a material mid-teens percentage over 12 months, a sharp ad-spend recession that could hit APP revenue ~20–30% in a downturn, and operational ramp fails (EUV throughput misses or Optimus project delays). Immediate (days) risk is momentum/speculation around splits; short-term (weeks–months) risks center on quarterly results and policy headlines; long-term (years) hinge on capex cycles and robotics commercialization timelines. Hidden dependencies: ASML revenue concentrated in a handful of foundries; APP depends on UA CPI and platform policy.

Trade implications: Tactical longs: size ASML exposure 2–3% of portfolio via a 9–12 month call spread (buy Sep/Jan 2027 1,050/1,300) to capture secular AI-led capex while limiting premium; hedge with a 6–9 month 900–950 put if political risks spike. Pair trade: long APP (2% equity or 12-month LEAP) vs short TSLA (1–2%) via selling a 6–9 month call spread (collect premium) — valuation gap (P/E 78 vs 300) favors this relative play. Rotate 3–5% from high-duration EV/story names into semicap equipment and select adtech for next 6–18 months.

Contrarian angles: Consensus underestimates supply elasticity — ASML can incrementally lift output and cadence of NXE/High-NA programs over 24–36 months, capping near-term upside; splits (ASML, APP, TSLA) are retail-liquidity events, not catalysts for fundamentals. AppLovin’s 68% quarterly growth is impressive but dependent on sustained UA budgets and favorable CPI trends; an ad recession would be disproportionately punitive. Historical parallel: 2017–19 semicap cycles show equipment leaders run fast into policy shocks — protect position sizing and use option-defined risk.

Key Decisions for Investors

• Establish a 2–3% portfolio position in ASML (ASML) using a 9–12 month call spread (buy Sep/Jan 2027 1,050 call, sell 1,300 call) to capture AI-driven EUV demand; size to limit max loss to ~2–3% of portfolio and add a 6–9 month protective put at 900 if export-control rhetoric increases.
• Implement a relative-value pair: long AppLovin (APP) 2% weight via 12-month LEAP calls (Jan 2027) or equity, and short Tesla (TSLA) 1–2% via a 6–9 month call spread (sell 550/700) to express growth/valuation dispersion; rebalance if APP revenue growth falls below 30% y/y or TSLA posts two consecutive quarters of accelerating vehicle deliveries above consensus.
• Reduce 'story' / high-duration EV exposure by 2–4% and reallocate into semiconductor capital equipment and materials (overweight ASML and suppliers) for a 6–18 month horizon; trim further if ASML share price falls >12% from recent highs on non-fundamental headlines.
• Set hard monitoring triggers: cut ASML/APP exposure by half if (a) US export-control guidance reduces ASML China sales by >15% consensus, or (b) APP quarterly revenue growth drops below 30% and UA CPI rises >20% y/y; reassess positions at the next quarterly earnings release (within 30–60 days).