2 Top Stock Split Stocks to Buy Now

Netflix completed a 10-for-1 stock split (shares ~ $114) and ServiceNow’s board approved a 5-for-1 split pending shareholder approval on Dec. 5, reflecting both companies’ strong multi-year runs; Netflix reported revenue up 17% year-over-year to $11.5 billion driven by subscriber growth, price increases and advertising and currently trades at about 48x earnings and 11x sales. ServiceNow delivered Q3 subscription revenue of $3.3 billion (+22% y/y), total revenue of $3.4 billion (+22%), remaining performance obligations of $11.4 billion (+21%) and free cash flow of $592 million (+18%), and sees AI-related annual contract value topping $0.5 billion this year and >$1 billion next, with a forward P/E around 41. The splits could broaden the investor base but both stocks carry rich valuations and require sustained double‑digit top‑ and bottom‑line growth to justify current multiples; Netflix faces rising content costs and competition for viewing time while ServiceNow is exposed to enterprise and government budget cycles, making them appropriate for long‑term investors who can tolerate volatility.

Analysis

Netflix completed a 10-for-1 stock split, lowering the post-split share price to roughly $114 and potentially broadening its investor base after a multiyear run that left shares up nearly 900% over the last decade. The split coincides with accelerating top-line momentum: revenue rose 17% year-over-year to $11.5 billion driven by member growth, price increases and advertising, but the stock trades at a demanding ~48x forward earnings and ~11x sales, which requires sustained margin expansion to justify current multiples.

ServiceNow's board approved a five-for-one split subject to shareholder approval on December 5, following a strong Q3 where subscription revenue reached $3.3 billion (+22% y/y), total revenue was $3.4 billion (+22%), remaining performance obligations climbed to $11.4 billion (+21%), and free cash flow rose 18% to $592 million. Management positions ServiceNow as an AI beneficiary, forecasting AI-related ACV >$0.5 billion this year and >$1 billion next, supporting its ~41x forward P/E but leaving the company exposed to enterprise and government budget cycles.

Both splits are cosmetic and do not alter fundamentals; investors must weigh high valuations and execution risk—Netflix's escalating content costs and competition for viewing time and ServiceNow's concentration in large enterprise/government budgets—against clear revenue and cash-flow growth, making these names more suitable for long-horizon investors who can tolerate volatility.

Key Decisions for Investors

• Consider a modest, long-term position in Netflix only if comfortable with a ~48x forward P/E and monitor subscriber growth, advertising revenue cadence and content spend to validate margin expansion
• Consider accumulating ServiceNow on meaningful pullbacks given 22% revenue growth, $11.4 billion RPO and an AI ACV runway toward >$1 billion, but confirm shareholder approval of the 5-for-1 split on December 5
• Size positions conservatively and use position limits or hedges because both stocks trade at premium multiples that require sustained double-digit top- and bottom-line growth to avoid sharp downside
• Track near-term indicators: Netflix operating margin trends and advertising contribution, and ServiceNow subscription growth, RPO conversion and free cash flow progression as primary triggers to add or trim exposure