The first 10 months of 2025 have been rather quiet when it comes to stock splits, but we're starting to see more activity. In fact, so far in the third-quarter earnings season, we've seen two major stock split announcements from major tech companies.
With that in mind, here's a rundown of the details surrounding both of the high-profile splits we recently learned about, as well as what investors need to know both before and after a stock split goes into effect.
AI software demand has led to a high stock price
First came ServiceNow (NOW 2.54%). Along with excellent third-quarter earnings results, ServiceNow also announced a five-for-one stock split.
The enterprise software company has been a major beneficiary of the AI boom and saw its already impressive revenue grow by 22% year-over-year. The company increased full-year guidance, and management said that the contract value of the company's AI business is expected to nearly double in 2026.
On the bottom line, net income grew by about 16%, and the company's remaining performance obligations stood at about $11.4 billion -- representing nearly a year's worth of revenue.
As mentioned, the board of directors approved a five-for-one stock split. ServiceNow has a stock price of nearly $950 as of this writing, and the split is specifically intended to make the stock more accessible to retail investors. The timing of the split is a little uncertain, as it is contingent on getting shareholder approval at a special meeting on Dec. 5.
The streaming giant is finally splitting its stock
As one of only 10companies in the S&P 500 with a share price over $1,000, many investors had expected Netflix (NFLX 0.91%) to split its shares at some point. Well, that point has arrived.
Unlike ServiceNow, Netflix didn't announce the split along with its earnings report but waited a little over a week after its third quarter results were announced.
To be sure, Netflix missed earnings and the stock fell. Revenue met expectations but earnings fell short due to a one-time (unexpected) foreign tax expense. As a result, Netflix lowered its operating margin guidance for the year. Another potentially negative issue is that while management said that ad revenue will more than double this year, no actual figures were given.
It's also important to note that this isn't waiting for any type of shareholder approval. Shareholders of record as of Nov. 10 will get nine additional shares for every share they currently hold, and the new shares will arrive in their account on Nov. 14 (presumably after the close). Netflix will begin trading at the split-adjusted price on Nov. 17.
As is the case with most stock splits, Netflix also made the change in order to make its shares more accessible, particularly to employees who participate in Netflix's stock option program. This is Netflix's third stock split, with previous splits completed in 2004 and 2015.
What does it mean to investors?
It's important to realize that a stock split doesn't fundamentally affect your investment. If you own shares of ServiceNow or Netflix prior to their respective splits, you'll still have the same equity in the business -- you'll just own more shares that each represent a smaller percentage of the company.
If you don't already own these stocks, it only makes a real difference if you use a broker that doesn't offer fractional shares. In this case, it could certainly make the shares more accessible.
The bottom line is that a stock split usually happens when things have generally gone well for a business and therefore has pushed the share price to a high level. But it's important for investors to realize that it doesn't change anything about the business or your level of ownership.
