Why Netflix, Costco, and Meta Platforms Might Split Their Stocks in 2025
Netflix (NASDAQ: NFLX), Costco (NASDAQ: COST), and Meta Platforms (NASDAQ: META) are leading candidates for stock splits in 2025. These companies have seen impressive growth, with share prices rising an average of 500% over the last three years. Yet, this success presents a challenge: accessibility for average investors, particularly those participating in company stock purchase programs.
When stocks reach high prices, like these thousand-dollar shares, everyday investors find it difficult to buy them. A stock split helps by lowering the per-share price, thus making it easier for a larger pool of investors to participate. This increased accessibility can enhance ownership, decrease volatility, and support continued price increases.
Several factors contribute to the strong outlook for Netflix, including rising margins, healthy cash flow, and improving debt ratings. Investors should note that business trends are expected to remain strong in 2025, with the potential for even more rapid growth in 2026, particularly fueled by its advertising business.
The ad revenue stream is quickly gaining traction and is likely to attract substantial global advertisers, leading to increased profits. Netflix has successfully utilized its cash flow to reduce debt and fund share buybacks, which resulted in a 1.5% reduction in share count in 2024.
After its Q4 2024 earnings release, Netflix’s stock surpassed the $1,000 mark and may touch $1,100 or even higher this year based on technical trends. Analysts suggest a possible price movement into the $1,100 to $1,200 range could make a 10-for-1 stock split likely.
Costco Accumulates Cash: Investors Anticipate Special Dividend
Costco’s updates for calendar 2024 show market share growth and a strong cash position, which is vital for further expansion. The company has been steadily growing its cash flow, raising hopes for another special dividend in the near future.
The last special dividend was issued in late 2023, and based on current business performance, another could come by late 2025. This anticipation, coupled with strong business results, has kept Costco’s stock price above $1,000, making a 10-for-1 stock split highly probable.
Meta Platforms’ Stock Performance Accelerates in 2025
In Q1 2025, Meta Platforms saw a notable rally in its stock price, building upon the strong results from 2024 and expectations for continued success in the upcoming years. Key drivers include the positive effects of AI, which enhance both business operations and efficiencies. The Q4 report indicated rising user numbers, increased ad engagement, and higher revenue per ad, all contributing to stronger financials.
Looking ahead to 2025, increased spending on AI appears to be beneficial rather than detrimental. While Meta’s stock is currently below the $1,000 mark, it is approaching that target quickly. Following Q4 results and optimistic guidance for 2025, analysts raised their price targets, with the consensus estimate increasing by 10% and suggesting potential highs near $875 as the year unfolds.
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The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.
