Tech Giants Go for Stock Splits: Netflix's Plot Twist and ServiceNow's Accessibility Play

The Drama Unfolds in US Markets

The stock split narrative just took an interesting turn in Q3 earnings season. While the market had been relatively quiet on this front for most of 2025, we suddenly have two major tech companies making bold moves—but with very different circumstances behind them.

Netflix surprised everyone by announcing a 10-for-1 stock split coming in November, despite posting disappointing earnings. Here’s the twist: the company actually missed its earnings targets. Revenue came in as expected, but a surprise one-time foreign tax expense tanked the bottom line, forcing management to trim operating margin guidance. Adding to the uncertainty, while executives teased that ad revenue would more than double this year, they conveniently avoided sharing concrete numbers. Yet somehow, the split announcement still happened. This marks Netflix’s third stock division, following previous splits in 2004 and 2015.

ServiceNow took a different route, pairing its stock split announcement with genuinely solid earnings. The enterprise software company—a clear winner in the AI boom—delivered a 22% year-over-year revenue surge and increased its full-year outlook. Management projected that their AI business contract value could nearly double in 2026. Shareholders will vote on a 5-for-1 split at a special meeting on December 5, though the current share price hovering near $950 suggests the move is aimed at retail investor accessibility.

The Mechanics: What’s Actually Changing?

Here’s what matters and what doesn’t:

A stock split fundamentally changes nothing about the underlying business. If you own Netflix or ServiceNow shares before the split, your ownership percentage stays identical—you’re just holding more pieces of the same pie. Each share becomes worth proportionally less, but your total equity in the company remains constant.

However, there’s one practical difference: if your broker doesn’t support fractional share purchases, splits can suddenly open the door for retail investors who previously couldn’t afford a full share. Netflix shareholders of record as of November 10 will receive nine bonus shares per existing share, with new shares hitting accounts on November 14. Trading at the adjusted price begins November 17.

ServiceNow’s situation differs slightly—their split requires shareholder approval first. The December 5 vote will determine whether the current ~$950 price point gets divided five ways.

Why Now? The Real Story Behind the Numbers

Both companies are making the same argument: making shares more accessible, particularly to employees participating in stock option programs. But the underlying business health tells different stories.

ServiceNow’s split announcement makes intuitive sense—stellar Q3 results, strong guidance, and contract obligations worth $11.4 billion (essentially a full year’s revenue) justify the celebration. The company is riding genuine AI adoption momentum, making the share price spike feel earned.

Netflix’s timing looks more strategic. Announce the split after earnings miss? It’s a classic investor psychology move—redirect attention from disappointing results to a tangible “positive” action. Yes, it’s the company’s third split, but shareholders might appreciate the gesture even as margin guidance gets trimmed.

The Bottom Line for Investors

Stock splits typically arrive when a company has performed well enough to push share prices into the stratosphere. It’s a sign of success, not a sign of trouble. But here’s what shouldn’t change your investment thesis: the split itself doesn’t alter whether you should own the stock.

If you don’t own these shares, a split only matters if your broker lacks fractional share support. If you already own them, congratulations—you’re getting more shares representing the exact same ownership stake. That’s it. The business fundamentals remain unchanged; the capital allocation stays the same; the competitive position stays the same.

What should matter to US investors is whether ServiceNow’s AI momentum sustains, whether Netflix can justify its margin cuts, and whether either company represents good value at current levels. The split is just accounting theater—important for employee engagement and retail accessibility, but meaningless for assessing business quality.