The recent rally has broken many records, and even as AI stocks have cooled after the DeepSeek spook, many stocks continue to trade at nosebleed valuations. Retail investors have been flooding into the markets and companies are repositioning their shares for maximum appeal in the current market.
Stock splits can signal strength in the market and while people can buy fractional shares these days, having a high stock price on paper can make it look quite unappealing psychologically for many retail investors. As a result, most stock split announcements are met with lots of bullish price action immediately. Stock splits are also great for increasing liquidity to tighten bid-ask spreads and smoothen the trading experience.
It is thus a good idea to keep your eye on these stock split contenders. There are many stocks around the $1,000 per share price tag. Plus, if we see further rate cuts from the Fed due to the Trump administration’s pressure, it could unleash even more cash into the market.
24/7 Wall St. Key Points:
- Some stocks are reaching quadruple-digit valuations after rallying in the past two years.
- This is a level where management usually starts to think about going through a stock split.
- These stock splits could drive significant gains. In the meantime, grab our free “The Next NVIDIA” report. It includes a software stock with 10X potential.
Here are the two stocks that could split in 2025:
Netflix (NFLX)
Netflix (NASDAQ: NFLX) surged to all-time highs in 2025 and is trading near $972 as of writing. Shares are now approaching $1,000 per share, so there is a good chance that management could split the stock.
Netflix previously executed two stock splits: one in February 2004, 2-for-1, and another one in July 2015, a 7-for-1 stock split at around $700. The current price is much higher, so a 2025 stock split seems likely.
Moreover, there’s a lot of analyst chatter about how high NFLX stock could go this year. Rosenblatt Securities doubled its price target to $1,494. This is due to the 2025 EPS forecast at $24.38 (up 23%). The top line is also expected to rise 12 to 14% to $43.5 billion to $44.5 billion.
The fundamental drivers go beyond those two figures. Netflix added 18.9 million subscribers in Q4 2024 and ads now account for 55% of new signups in available markets. It also has new seasons of Stranger Things and Squid Game in its pipeline.
That said, you should keep in mind that NFLX stock is currently trading at 39 times forward earnings. You’re also paying 9.4 times forward sales. Both multiples are on the steeper side for the growth you are getting here and they are highly dependent on the sort of content Netflix will have available in the coming quarters.
Costco (COST)
Costco (NASDAQ: COST) currently trades around $955 and is near all-time highs. A split could make the stock a lot more attractive, and many on Wall Street already think a split is coming. Oppenheimer and Jefferies both think a potential split is in play and have price targets up to $1,145. The consensus price target is at $1,013.
Costco last split its stock in 2000 (2-for-1) and it was followed by a 15% outperformance vs. the S&P 500 over five years despite the dot-com crash. Earlier splits also led to market gains for Costco, so there’s more than enough incentive for the company’s management to carry out another stock split.
The fundamentals are also very strong. Q1 2025 revenue rose 7.5% year-over-year to $61 billion, with paid members growing 7.6% to 77.4 million. Costco opened 30 new warehouses and has plans for 29 more this year. It also has a $1.16 quarterly dividend and a history of special dividends (like $15 per share in 2023).
That said, management could still be cautious since the earnings multiple is at 55 times and the stock was rejected at the $1,000 level back in December. It is down 3.8% since then. It could fall even further if contract negotiations fail since 18,000 unionized Costco employees have authorized a strike starting on February 1, 2025. Nonetheless, a stock split is still possible here if it rises above $1,000. It is starting to deter smaller investors and hurt liquidity. Walmart (NYSE: WMT) announced its split exactly one year ago, so there’s good precedent for Costco to do the same.
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