Tech giants like Netflix and Meta Platforms may follow Nvidia in executing a stock split

From Nasdaq MarketSite: 2024-07-10 05:40:00

The rising stock prices of successful companies can make it difficult for smaller investors to afford shares, leading to stock splits. Nvidia executed a 10-for-1 split to make its stock more accessible. Other tech giants like Microsoft and Apple have done the same in the past, and companies like Netflix and Meta Platforms could follow suit, given their high stock prices.

Netflix is the dominant streaming platform with 269.9 million subscribers and a strong financial position, generating $6.4 billion in net income from $34.9 billion in revenue. The company is investing heavily in original content, live programming, and new subscription tiers to attract a broader audience. With only 8.1% of TV viewing time in the U.S., there is significant room for growth and potential for increased ad revenue.

Meta Platforms, home to social media platforms like Facebook and Instagram, serves 3.2 billion people daily and is focused on AI development. Meta AI, with features like Llama 3 LLM and personalized chatbots, presents new monetization opportunities. The stock is currently undervalued with a P/E ratio of 31 and is expected to rise significantly, potentially leading to a stock split in the future.

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