It's been a fantastic year for the stock market. The S&P 500, Nasdaq Composite, and Dow Jones Industrial Index are up 21.9%, 22.2%, and 13.7% year to date, respectively, at this writing.
With so many stocks moving higher, there are bound to be a few stock splits coming, and I think these three tech stocks could be among them.
Image source: Getty Images.
1. Netflix
With a share price above $700 as of this writing, it's clear that Netflix (NFLX 1.01%) is ready for a stock split. The company last split its shares back in 2015, and with its stock trading near its all-time high, another split could be announced as soon as this month.
NASDAQ: NFLX
Key Data Points
Yet even if Netflix's board of directors passes on a stock split, investors should strongly consider adding shares of this streaming giant to their portfolios. The company has demonstrated that it can more than hold its own against stiff competition from the likes of Amazon, Apple, and Disney, among others.
Despite increased competition over the last three years, Netflix has grown its revenue by 22% over that period. Moreover, its operating margin now stands at 24% -- the highest in its time as a public company.
NFLX Operating Margin (TTM) data by YCharts.
That's all thanks to keen policy decisions such as cracking down on password sharing and instituting an advertising-supported tier.
In short, Netflix has withstood serious challenges over the last few years and is arguably stronger than ever. Investors should take notice.
2. Spotify Technology
Spotify Technology (SPOT 1.77%) had its initial public offering (IPO) in 2018, and has never split its stock. That could change soon, as the company's shares have almost doubled year-to-date to more than $360, making the stock one of the hottest performers this year.
NYSE: SPOT
Key Data Points
Among the reasons why Spotify could be poised to announce its first-ever split is the company's newfound profitability. CEO Daniel Ek pledged to bring costs down, and since then Spotify's operating margin has increased substantially. At its lowest, the company's operating margin stood at negative 6.9%. It has boosted that to 2.7% by raising subscription fees and engaging in several rounds of layoffs.
SPOT Operating Margin (TTM) data by YCharts.
In any event, stock split or not, Spotify remains a company that investors should consider.
3. Meta Platforms
Meta Platforms (META +1.22%) has been one of 2024's best-performing stocks. Year-to-date, Meta shares are up 68% to nearly $600, near their all-time high.
NASDAQ: META
Key Data Points
That said, Meta may not split its shares -- even if investors would love for it to do so.
Notably, it is the only "Magnificent Seven" stock that has never split its shares. That doesn't mean that Meta won't do it eventually, but history is not on the side of those wishing for a split.
Nevertheless, investors may want to consider buying shares of Meta given its incredible growth and profitability. In the second quarter, Meta's revenue surged by 22%, while net income soared by 73%. The company's massive scale makes it one of the biggest players in the still rapidly growing digital ad market. With that in mind, many portfolios would benefit from adding shares of Meta -- whether they split or not.
