Prediction: These 2 Stocks Will Split This Year

Stock splits create a lot of buzz in the stock market. A stock split happens when a company divides its shares into additional shares. While it doesn’t change anything fundamentally about the company, the existing shareholders receive more shares. Stock splits do have an impact on the stock price and they trigger positivity around the company.

It is a form of financial engineering. When the stock prices start to hover around all-time highs, investors think of it as expensive and start looking for alternatives. This is when the management considers a split. Investors often see it as a signal that the management hopes for bullishness in the coming months. Several companies announced a stock split in 2024 including tech giant Nvidia (NASDAQ:NVDA). We’re halfway through 2025 and I believe these two stocks will split this year.

Netflix

Streaming giant Netflix (Nasdaq: NFLX) has remained away from a stock split for a long time. It last split its stock in 2015 when its shares were close to $1,200. The company has reported blockbuster quarterly results and is steadily growing subscribers. Exchanging hands for $1,225 today, the stock is up 38% year-to-date and a whopping 81% in 12 months. Netflix stock is very close to its last stock split value and I believe there could be a split this year.

Despite rising competition and market volatility, Netflix has maintained consistent growth. The revenue came in at $39 billion for 2024 and its net income for the year was $8.71 billion, up 61% from FY 2023. In the first quarter, Netflix reported a revenue of $10.54 billion and a net income of $2.89 billion.

The company increased its pricing in January and despite the hike, it managed to beat expectations. It ended 2024 with over 300 million paid streaming members and there’s still room for growth. As Netflix continues to expand into new regions, its streaming content is set to disrupt traditional video in the coming years. In its mature markets, it is growing revenue through advertising and has added an ad-supported tier. The advertising revenue in 2024 stood at $10.2 billion, up 16% YOY. The company expects to double its ad revenue in 2025.

The company has expanded into live events and sports content. It signed a long-term contract with the World Wrestling Entertainment. Additionally, it continues to invest in original content which is the main attraction for subscribers.

NFLX stock isn’t cheap today. It has a P/E of 57.90 and is trading at a premium. Regardless of when it splits the stock, I believe Netflix is a strong business with the potential to keep expanding in the coming years.

Spotify

While Netflix is a strong top-quality business, another streaming giant Spotify Technology S.A. (NYSE: SPOT) has been rallying this year. Spotify stock is up 56% year-to-date and 129% in 12 months. Since 2022, the stock has soared over 600%. Exchanging hands for $715, the stock is very close to its all-time high of $723. Since its initial public offering in 2018, the company has never split stock.

Spotify does not have to worry about the impact of tariffs which makes it a safer stock to invest in today. In 2024, the company reported the first full year of profit and the numbers are impressive. The revenue came in at $16.1 million and saw subscriber growth despite price hikes. Its cost-cutting measures have also helped the profit soar. It ended the year with 263 million paid subscribers.

In the first quarter, the company saw a 15% year-over-year jump in revenue and a 32% growth in gross profit. Its premium subscribers were up 12% year-over-year while the monthly active users jumped 10%.

Clearly, the company’s diversified portfolio is the reason people are attracted to the platform and stick to it despite the higher prices. It offers a catalog of podcasts, music, and audiobooks. Spotify has become a go-to for many and consumer loyalty is driving business growth.

There’s nothing to not like about Spotify as an investment. Wall Street is bullish on the stock and half a dozen analysts have a buy rating. Evercore ISI has a price target of $750 with an outperform rating.

Spotify is an expensive stock and is trading at a premium today. However, given the fact that the company is tariff-resistant, has strong upside potential, and is on a rally, I see Spotify as a strong investment opportunity.

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