Potential Stock Splits in 2025: 2 High-Flying Stocks to Watch
Stock splits often signal confidence from company management about sustained growth. While they don’t impact a company’s fundamentals, splits make shares more accessible for investors, boosting interest and trading activity. Savvy investors who identify strong candidates for stock splits—particularly those with solid financials—can benefit from the post-announcement momentum.
Two standout companies, Meta Platforms (NASDAQ: META) and Netflix (NASDAQ: NFLX), have seen meteoric rises of 390% and 300% respectively since the market bottomed on October 12, 2022. Both stocks are trading at high nominal prices, making them prime candidates for a 2025 split. Wall Street remains optimistic, predicting further upside.
1. Meta Platforms: Up 390% Since October 2022
Meta’s incredible turnaround stems from a laser focus on efficiency. CEO Mark Zuckerberg declared 2023 the "year of efficiency," streamlining costs while prioritizing impactful initiatives. This approach drove operating earnings up 62% in 2023 and 52% in the first nine months of 2024—even as Meta invested heavily in artificial intelligence.
AI is central to Meta’s success. Its advanced machine learning algorithms enhance content recommendations, increasing user engagement and ad performance. Now, generative AI is unlocking even more opportunities:
Enhanced user-generated content on apps like Facebook and Instagram.
Improved interactions between businesses and customers via messaging.
Greater ad optimization, where businesses set objectives and budgets, and AI handles the rest.
Currently trading at $620, Meta’s stock could benefit from a split to align with peers like Amazon and Alphabet, which split shares in recent years. While Wall Street’s median target of $660 suggests modest upside, Meta’s valuation—under 25 times 2025 earnings estimates—remains a bargain compared to other AI-driven companies. Analysts may soon revise targets upward, especially as AI initiatives continue to reshape the business.
2. Netflix: Up 300% Since October 2022
Netflix’s resurgence has been driven by two major strategic moves:
Ad-Supported Tier: Introduced in late 2022, this low-cost option has attracted 70 million viewers and reignited subscriber growth, up 27% in two years.
Advertising Expansion: Netflix’s growing ad business is a game-changer. The company launched its own advertising technology in select markets, with plans for a global rollout in 2025. This opens significant revenue potential without relying on constant price hikes.
With its massive scale, Netflix is now an attractive platform for advertisers, enabling new content opportunities like live events and sports. Despite trading at 46 times forward earnings, Netflix’s strong operating leverage could fuel substantial earnings growth over the coming years. Investors who capitalized on Netflix’s high valuation during its transition in the 2010s saw huge gains, and history may repeat itself as Netflix shifts more revenue toward advertising.
Final Thoughts
Both Meta and Netflix have delivered exceptional performance and remain poised for further growth. Their high stock prices make them compelling candidates for splits in 2025, potentially drawing even greater investor interest. While stock splits don’t alter fundamentals, the underlying strength of these businesses makes them worth a closer look for long-term investors.
Stock splits often signal confidence from company management about sustained growth. While they don’t impact a company’s fundamentals, splits make shares more accessible for investors, boosting interest and trading activity. Savvy investors who identify strong candidates for stock splits—particularly those with solid financials—can benefit from the post-announcement momentum.
Two standout companies, Meta Platforms (NASDAQ: META) and Netflix (NASDAQ: NFLX), have seen meteoric rises of 390% and 300% respectively since the market bottomed on October 12, 2022. Both stocks are trading at high nominal prices, making them prime candidates for a 2025 split. Wall Street remains optimistic, predicting further upside.
1. Meta Platforms: Up 390% Since October 2022
Meta’s incredible turnaround stems from a laser focus on efficiency. CEO Mark Zuckerberg declared 2023 the "year of efficiency," streamlining costs while prioritizing impactful initiatives. This approach drove operating earnings up 62% in 2023 and 52% in the first nine months of 2024—even as Meta invested heavily in artificial intelligence.
AI is central to Meta’s success. Its advanced machine learning algorithms enhance content recommendations, increasing user engagement and ad performance. Now, generative AI is unlocking even more opportunities:
Enhanced user-generated content on apps like Facebook and Instagram.
Improved interactions between businesses and customers via messaging.
Greater ad optimization, where businesses set objectives and budgets, and AI handles the rest.
Currently trading at $620, Meta’s stock could benefit from a split to align with peers like Amazon and Alphabet, which split shares in recent years. While Wall Street’s median target of $660 suggests modest upside, Meta’s valuation—under 25 times 2025 earnings estimates—remains a bargain compared to other AI-driven companies. Analysts may soon revise targets upward, especially as AI initiatives continue to reshape the business.
2. Netflix: Up 300% Since October 2022
Netflix’s resurgence has been driven by two major strategic moves:
Ad-Supported Tier: Introduced in late 2022, this low-cost option has attracted 70 million viewers and reignited subscriber growth, up 27% in two years.
Advertising Expansion: Netflix’s growing ad business is a game-changer. The company launched its own advertising technology in select markets, with plans for a global rollout in 2025. This opens significant revenue potential without relying on constant price hikes.
With its massive scale, Netflix is now an attractive platform for advertisers, enabling new content opportunities like live events and sports. Despite trading at 46 times forward earnings, Netflix’s strong operating leverage could fuel substantial earnings growth over the coming years. Investors who capitalized on Netflix’s high valuation during its transition in the 2010s saw huge gains, and history may repeat itself as Netflix shifts more revenue toward advertising.
Final Thoughts
Both Meta and Netflix have delivered exceptional performance and remain poised for further growth. Their high stock prices make them compelling candidates for splits in 2025, potentially drawing even greater investor interest. While stock splits don’t alter fundamentals, the underlying strength of these businesses makes them worth a closer look for long-term investors.