1 Megacap Tech Stock That Could Split Its Shares Next

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1 Megacap Tech Stock That Could Split Its Shares Next

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shares trade significantly higher than the levels they did before the company’s last stock split in 2015.

The company’s business is firing on all cylinders, making this a good time to split shares.

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expects double-digit revenue growth and significant operating margin expansion this year.

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(NASDAQ: NFLX) stock has recently blown past $1,200 per share, making it hard to believe that shares traded at levels below $200 as recently as May of 2022. And the stock’s momentum is strong this year, too. Shares are up about 40% this year alone, defying the market’s sluggish return of less than 2% as of this writing.

With a combination of a strong business, impressive stock price momentum, and a share price in the thousands, a stock split could be in the cards for the streaming giant soon.

Image source: Getty Images.

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’s performance has been stellar. In the first quarter of 2025, revenue rose 12.5% year over year to about $10.5 billion, and earnings per share soared 25.2%. Helping the company achieve such strong earnings-per-share growth is

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’s widening operating margin. The key profitability metric hit 31.7% in the quarter, up from 28.1% in the year-ago *******. The company also reported free cash flow of $2.7 billion, up 25% year over year.

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’s business growth has been fueled primarily by three key tailwinds: membership growth, price increases, and a fast-growing advertising business. Importantly, the company believes all three of these catalysts have room to run. In its first-quarter update, management reaffirmed its guidance for full-year revenue to increase 11.5% to 14.1% year over year. This growth, management explained, “assumes healthy member growth, higher subscription pricing and a rough doubling of our ad revenue … ” Additionally, management continues to forecast a full-year operating margin of 29%, up substantially from 26.7% in 2024.

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hasn’t split its shares since 2015. Back then, a 7-for-1 split lowered the stock price from about $700 to $100. Today, the share price is nearly double its pre-split peak. That alone doesn’t guarantee a stock split. But historically, splits are more likely when a stock becomes expensive (in terms of the share price) relative to other megacaps and the company is on solid footing.

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checks both boxes.

There’s a sense of déjà vu with

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today. Just as has been the case recently for the company, it was experiencing strong subscriber growth, record earnings, and benefiting from strategic catalysts the last time it split its stock.

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Also strengthening the case for a stock split,

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shares currently trade far higher than other tech leaders like

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, Meta Platforms, Apple, and Nvidia.

Of course, a stock split would not affect the company’s fundamentals, but it would lower the price per share and make

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more accessible to retail investors. But it’s worth emphasizing that a stock split, in and of itself, isn’t a reason to buy a stock. It is, however, often a symptom of strong underlying business momentum — momentum strong enough to cause investors to bid up the share price to a level worthy of a stock split.

It’s also worth noting that even though

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’s business is doing extraordinarily well, investors seem to already be pricing in this momentum. Shares trade at 59 times earnings. All else equal, this

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will likely come down meaningfully if the company delivers on its revenue growth and operating margin expansion targets for the full year. A combination of double-digit revenue growth and margin expansion should help earnings per share grow dramatically. But with a price-to-earnings multiple well in excess of even fast-growing tech giant Nvidia’s, investors seem to be already betting on more staggering growth from the streaming giant.

With a surging stock price, impressive revenue growth, and a nascent and fast-growing advertising business,

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is a top contender for the next big tech stock split. Though the company hasn’t announced plans to split its shares, it’s starting to look overdue.

Before you buy stock in

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, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 

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for investors to buy now… and

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wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when 

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 made this list on December 17, 2004… if you invested $1,000 at the time of our recommendation, you’d have $674,395!* Or when Nvidia made this list on April 15, 2005… if you invested $1,000 at the time of our recommendation, you’d have $858,011!*

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*Stock Advisor returns as of June 2, 2025

Randi Zuckerberg, a former director of market development and spokeswoman for

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and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool’s board of directors.

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and his clients have no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Apple, Meta Platforms,

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,

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, and Nvidia. The Motley Fool recommends the following options: long January 2026 $395 calls on

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and short January 2026 $405 calls on

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. The Motley Fool has a

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.

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was originally published by The Motley Fool

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#Megacap #Tech #Stock #Split #Shares

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