Stock splits don’t change how much a company is worth, but they make each share cheaper and easier for people to buy, considering it’s a forward split. Stock splits can vary from a simple 2-for-1 split to a larger 100-for-1 split or more. In a 2-for-1 split, each share is turned into two new shares. This makes each share half the price, but the total value of the company remains the same. For example, if a share costs $100, after a 2-for-1 split, you’ll have two shares that cost $50 each. This can make it easier to buy shares and attract more people to invest. Even though the share price goes down, the total amount of money paid out to shareholders stays the same. Hence, splitting shares doesn’t change how much control existing shareholders have in the company. The main goal is to make the company’s stock more appealing to investors. There’s no proof that stock splits make a company better, but they can make investors feel more positive about the company. But with these benefits come the costs and risks. The process requires legal work and can be expensive.
Splitting a stock doesn’t change a good company into a bad one or vice versa. The price might go up a bit after the split, but it won’t change the company’s long-term fundamentals. Sometimes, a low stock price can actually look bad for a big company. Still, many companies practice splitting stocks if their share prices are growing too high.
2025 Outlook
On January 16, Mark Newton, Fundstrat Global head of technical strategy, joined ‘Squawk Box’ on CNBC to discuss that the long-term market trends look positive. The market initially experienced a cooler-than-expected jump, but concerns were raised about the breadth of the market and the potential impact of interest rates on small-cap stocks. Mark Newton expressed a constructive view but noted that the market’s breadth had deteriorated significantly, with only about 25% of stocks currently above their 50-day moving average. This decline was particularly evident in sectors like healthcare, where seven sectors lost more than 4% in the last month.
Despite these challenges, Newton highlighted that technology stocks had rebounded, helping to keep indices afloat and maintaining long-term trends. However, he noted that near-term sentiment had become pessimistic regarding the potential policies of the president-elect, which added to market uncertainty. He maintained his target for the S&P 500 at 6650, suggesting that interest rates might begin to roll over in the coming months, which could be bullish for equities given their recent correlation with treasury yields.
As it’s reasonable to infer that there could be growth in the market in 2025, we’re here with a list of the 12 stocks that could split in the near future.
A person holding a cup of coffee while reading stock market data on the phone. Photo by Anna Nekrashevich on Pexels
Methodology
We sifted through ETFs, online rankings, and internet lists to compile a list of the top stocks trading over $400 as of January 19. We then selected the 20 stocks with high surges in their share prices in the past 5 years and a history of splitting stocks. From that, we picked the top 12 stocks that were the most popular among elite hedge funds and that analysts were bullish on. The stocks are ranked in ascending order of the number of hedge funds that have stakes in them, as of Q3 2024.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
12 Stocks That Could Split in the Near Future
12. Texas Pacific Land Corp. (NYSE:TPL)
Share Price as of January 19: $1,412.80
Surge in Share Price in 5 Years: 434.56%
Stock Split Confirmed: No
Number of Hedge Fund Holders: 20
Texas Pacific Land Corp. (NYSE:TPL) is an energy company that focuses on land and resource management in the Texas Permian Basin. It owns oil and gas royalties and manages surface land, while also providing water services to oil and gas operators in the region.
The company’s produced water royalties business primarily contributes to its profitability. So it makes money by allowing operators to utilize its surface land for saltwater disposal (SWD) operations. It has agreements with operators that provide it with exclusive rights to offtake produced water for treatment and resale.
In Q3 2024, produced water royalty volumes surged by 46% year-over-year, driven by the expansion of commercial arrangements with third-party customers. Texas Pacific Land Corp. (NYSE:TPL) is on track to collect royalties on over 1 billion barrels of produced water in 2024, generating ~$100 million in revenue, which matches last year’s record income from this segment. This is an increase from virtually zero produced water royalties in 2016 before the company pursued these agreements.
Texas Pacific Land Corp.’s (NYSE:TPL) expects this business to grow driven by acquisitions of surface acreage and ongoing commercialization efforts. For instance, it recently acquired 7,490 net royalty acres in the Midland Basin, which boosted production and promises future cash flow growth.
Wedgewood Partners highlighted the company’s strong performance but sold its shares due to a sharp stock price increase driven by index inclusion. The firm believes that the company’s intrinsic value hasn’t significantly changed and expects potential re-investment after market enthusiasm subsides. It stated the following regarding Texas Pacific Land Corp. (NYSE:TPL) in its Q4 2024 investor letter:
“Texas Pacific Land Corporation (NYSE:TPL) was a top contributor to performance during both the quarter and the year. Texas Pacific Land continues to be an extraordinarily unique and profitable business. The Company owns over 800,000 surface acres of land in the Texas Permian Basin. The vast majority of this land was acquired in the year 1888 and more recently (i.e. the last 15 years) this land became highly productive oil and gas royalty acreage thanks to modern drilling and completion techniques and technologies. Despite all of these deserved accolades, we liquidated our positions after the stock rallied quite sharply upon being consecutively added to two major stock indexes over the past seven months. The earnings power of the Company has not substantially changed over the past seven months (for better or worse). However, passive indexes and the traders and managers that closely follow and benchmark against those indexes effectively tripled their appraisal of the Company’s corporate value, while that value never changed. We will continue to monitor Texas Paci7ic Land from the sidelines and would hope to invest in them again, perhaps after the market’s “animal spirits” subside.”
11. W.W. Grainger Inc. (NYSE:GWW)
Share Price as of January 19: $1,113.60
Surge in Share Price in 5 Years: 227.38%
Stock Split Confirmed: No
Number of Hedge Fund Holders: 34
W.W. Grainger Inc. (NYSE:GWW) is a broad-line distributor of industrial supplies and maintenance products. These include MRO (maintenance, repair, and operations) supplies, tools, safety equipment, and facility maintenance items. With a large network of branches and online platforms, it caters to the diverse needs of businesses across several industries.
The company’s third-quarter growth in 2024 was driven by its data-driven initiatives. It implemented analytical tools that provide sales teams with valuable insights into customer needs. This leads to more effective interactions and driving sales growth. For instance, sales in the High-Touch Solutions segment grew by 3.3% year-over-year in Q3, due to the solid volume growth and improved price contribution. This segment includes core B2B customers.
W.W. Grainger Inc. (NYSE:GWW) is testing a GenAI model in its call centers, which aims to improve customer service efficiency by providing agents with quick and relevant responses to customer inquiries. This technology is expected to enhance customer satisfaction and drive operational efficiency.
ClearBridge Multi Cap Growth Strategy likes W.W. Grainger Inc. (NYSE:GWW) for its leadership in MRO, and share gain potential in a large market. It stated the following regarding the company in its first quarter 2024 investor letter:
“W.W. Grainger, Inc. (NYSE:GWW), in the industrials sector, was our largest new buy. Grainger is the biggest industrial maintenance, repair, and operations distributor in North America. The company is a share gainer in a large and fragmented market, with less than 10% share of the addressable market for their direct, “high touch solutions” business estimated at more than $165 billion. Grainger has also barely scratched the surface with its online “endless assortment” platform, Zoro.com, which targets an even larger market. In addition to its growth and profit potential, we are attracted to Grainger’s strong balance sheet and improved capital allocation under its current management.”
10. O’Reilly Automotive Inc. (NASDAQ:ORLY)
Share Price as of January 19: $1,216.79
Surge in Share Price in 5 Years: 176.12%
Stock Split Confirmed: No
Number of Hedge Fund Holders: 41
O’Reilly Automotive Inc. (NASDAQ:ORLY) is an auto parts retailer that provides automotive aftermarket parts, tools, supplies, equipment, and accessories for both professional and do-it-yourself customers. It provides new and remanufactured parts and maintenance items, like alternators, batteries, and brake system components.
The company’s Q3 2024 growth was driven by its Professional business, which saw a 15% year-over-year increase in ticket counts. This segment caters to professional mechanics and repair shops and delivered mid-single-digit comparable store sales growth in the third quarter. This represented a 7.9% growth. This was primarily due to an increase in the number of service transactions by 12%.
The focus on this segment is significant given the expected recovery in discretionary spending. Barclays analyst Seth Sigman raised his price target on the company to $1,110 from $1,088 on January 8, maintaining an Equal Weight rating. This reflects the firm’s improved outlook for the retail sector in 2025, as it anticipates discretionary spending to bounce back after a period of weakness.
Wedgewood Partners views O’Reilly Automotive Inc. (NASDAQ:ORLY) as a dominant player in the US automotive parts market. It benefits from competitors’ focus on other segments. While growth has normalized, the firm believes in the company’s strong market position. Here’s what is said in its Q4 2024 investor letter:
“O’Reilly Automotive, Inc. (NASDAQ:ORLY) modestly contributed to performance for the quarter and for the year. After a few years of outsized revenue and earnings growth, O’Reilly delivered more normalized sales and earnings growth in 2024 but continues to dominate in the highly fragmented automotive parts industry. As we have noted in the past, the Company has a mostly singular focus on the U.S. market, while several competitors have diverted their attention and investments away from the large and fragmented domestic market toward non-U.S. or nonautomotive markets. O’Reilly has taken profit share, particularly in the faster growing do-it-for-me (DIFM) end markets, by focusing both its hiring and capital expenditures on their U.S. stores and distribution infrastructure, while limiting acquisitions. We would consider adding to our positions in the future if short-term investors ever soured on shares due to protracted bouts of mild weather.”
9. Fair Isaac Corp. (NYSE:FICO)
Share Price as of January 19: $1,900.54
Surge in Share Price in 5 Years: 369.30%
Stock Split Confirmed: No
Number of Hedge Fund Holders: 47
Fair Isaac Corp. (NYSE:FICO) is a data analytics company that focuses on credit scoring services. It is known for the FICO Score, which is a credit score widely used by lenders to assess creditworthiness. It also provides other analytics solutions for financial services, healthcare, retail, and telecommunications.
A lot of its growth comes from the Scores segment of the company, which focuses on providing credit-scoring products and services (including B2B and B2C offerings). For the full fiscal year 2024, revenues for the FICO Score segment marked a 19% increase year-over-year. B2B revenue in this segment grew 27% in FY24, primarily due to mortgage originations. This refers to creating new home loans, including the application, approval, and funding stages. However, B2C revenue declined slightly, 2% for the year, mainly due to lower sales on the myFICO.com platform.
Mortgage origination revenues rose by 95% in the last quarter of FY24. For FY25, the company’s wholesale royalty for mortgage originations will be set at $4.95 per score, which represents a small fraction of the total mortgage cost. The FICO Score remains a crucial tool in the $2 trillion mortgage origination market.
Additionally, Fair Isaac Corp. (NYSE:FICO) is seeing strong adoption of its FICO Score 10 T, which has been adopted by major lenders, including United Wholesale Mortgages. This score is now used for credit decisions, securitization, and investor delivery. It’s also set to launch the FICO Score mortgage simulator, which will allow mortgage professionals to simulate potential changes in a borrower’s credit score. This will assist in offering more loan options and better interest rates.
On January 15, Jefferies Financial Group raised the company’s price target from $2,250 to $2,275, maintaining its buy rating on the stock. This raise reflects confidence in Fair Isaac Corp.’s (NYSE:FICO) strong performance and growth prospects in the technology sector. Carillon Eagle Mid Cap Growth Fund reported strong Q3 performance for the company, driven by pricing gains in its Scores business, and anticipated growth in mortgage activity. Here’s what the firm said in its Q3 2024 investor letter:
“Fair Isaac Corporation (NYSE:FICO) provides predictive analytics and data management products and services that enable businesses to automate, improve and connect decisions. The stock performed well during the period as quarterly earnings were strong and guidance was lifted. The quarter was highlighted by continued pricing gains in the company’s Scores business. Additionally, expectations of increased residential mortgage activity as interest rates move lower also aided the stock.”
8. Autozone Inc. (NYSE:AZO)
Share Price as of January 19: $3,228.40
Surge in Share Price in 5 Years: 179.62%
Stock Split Confirmed: No
Number of Hedge Fund Holders: 47
Autozone Inc. (NYSE:AZO) retails and distributes automotive replacement parts and accessories. It operates a network of stores and serves both professional mechanics and do-it-yourself customers. Some of its products include engine parts, brakes, and batteries, among other automotive components.
One of its key growth drivers is the domestic commercial (DIFM) business. It involves selling auto parts to professional repair shops and service providers who install them for customers. In FY24, domestic commercial sales increased 6.2% for the full year. This segment now represents 31% of domestic auto parts sales and 27% of total company sales.
This was fueled by the expansion of hub and mega-hub locations. Hub locations are central distribution points, whereas mega-hub locations are high-capacity centers that handle more inventory and logistics operations. The company added 8 hubs and 11 mega-hubs in FY24, bringing the total to 109 mega-hubs. These locations stock over 100,000 SKUs, which accelerate fulfillment speed and drive higher sales. Mega-hubs outperform standard stores and lift both commercial and DIY sales. Autozone Inc. (NYSE:AZO) aims to surpass 200 mega-hubs in the coming years.
As of January, the company has a consensus price target of $3322.71 based on the ratings of 26 analysts. Appalaches Capital highlighted in its Q3 2024 investor letter that Autozone Inc.’s (NYSE:AZO) strong market position is reinforced by its extensive inventory, supplier reliance, and favorable credit terms. Here’s what the firm said:
“Passing on cost structure benefits, sometimes called “Shared Economies of Scale,” is not the only form of these positive feedback loops. AutoZone, Inc.’s (NYSE:AZO) moat also deepens as it grows. While most would think of the company as a very good retailer, I would say that the business model is more nuanced than that. The automotive aftermarket is a highly fragmented and specialized industry. There are hundreds of companies producing automotive components, most of which are specific to one of thousands of vehicle models. In 2022, there were over 280 million registered vehicles in the U.S., further adding to the fragmented nature of the value chain.8 Outside of large metropolitan areas with public transportation, people rely heavily on their vehicles in all facets of their daily lives. Not having a working car poses significant problems. Whether it’s getting to work or shopping for groceries, if something breaks on your vehicle, you need it fixed immediately.
The combination of all of these factors leads AutoZone to maintain a large and diverse inventory that is ready on a moment’s notice. Manufacturers and vendors cannot sell directly to consumers because it would take too long for the product to arrive, and it would not be economical to build out their own distribution network given the low turnover of the inventory. AutoZone is heavily relied upon by their suppliers, and as a result, their suppliers give them very favorable payment terms allowing them to stock more inventory while tying up less working capital. The creditors of these suppliers additionally acknowledge the prowess of AutoZone, providing more flexible credit to suppliers if their inventory is sent to AutoZone. With more inventory, they can better meet the needs of their customers, resulting in higher sales and a more efficient network of stores, which in turn leads to a more effective service for suppliers. This is a very effective flywheel. AutoZone is not new to the portfolio, but I do enjoy writing about it.”
7. KLA Corp. (NASDAQ:KLAC)
Share Price as of January 19: $757.47
Surge in Share Price in 5 Years: 323.81%
Stock Split Confirmed: No
Number of Hedge Fund Holders: 61
KLA Corp. (NASDAQ:KLAC) designs and manufactures process control, process-enabling, and yield management solutions for the semiconductor and electronics industries. It operates in 3 segments: Semiconductor Process Control, Specialty Semiconductor Process, and PCB and Component Inspection. It offers a range of technologies including wafer inspection, metrology systems, and software solutions to improve production and yield.
Its performance in the September 2024 quarter was driven by the increasing demand for AI, especially in the memory sector, where investments in AI and high-bandwidth memory are positioning memory makers for growth in 2025. This is reflected in the rising demand for AI chips, which drives higher process control intensity. Additionally, the company has been readily adopting AI by integrating it into its products and designing its computer architecture to use GPUs.
KLA Corp.’s (NASDAQ:KLAC) investments in AI-driven innovations are expected to maintain its competitive edge. The company forecasted $2.95 billion in revenue for the December quarter, with non-GAAP gross margin expected to increase to 61.5%. Earlier on January 13, Needham analysts had upgraded the company’s stock from Hold to Buy, setting a price target of $750. This reflected confidence in the company’s ability to outperform competitors in challenging times. Despite challenges in the semiconductor industry, its financial health and consistent profitability position it for growth.
Vltava Fund expressed confidence in the company along with some other key players in the growing semiconductor industry. The firm viewed them as critical investments for long-term growth and stated the following in its Q4 2024 investor letter:
“In the quarter just ended, we added to the portfolio two new companies from the technology sector: Applied Materials and Lam Research. Both are in the same industry as is another of our investments that we have held for some time, KLA Corporation (NASDAQ:KLAC). This industry is termed semiconductor devices and materials. One chapter in Hidden Investment Treasures is devoted to investing in technology companies and, among other things, the controversy over what really constitutes a technology company. As investors, we try to view technology companies not according to the industry into which they are formally classified but by whether the technologies and technological processes used in the production of their products and services are an essential element in value creation or if they are a source of long-term, sustainable competitive advantage. Among the companies that are formally categorized as technology-based and fall into either the Information Technology or the Communications Services sector, we find some that can be said to be just that but also others for which this classification is at least debatable. Similarly, among companies that do not formally belong to these two sectors, we find many that clearly are built to a large extent on technology and base their market positions and competitiveness on it. In the cases of Applied Materials and Lam Research, there can be no doubt that these are technology companies not only as a formality but also in fact.
Dozens of companies are directly or indirectly involved in the production of semiconductors. Within this broad group of companies, there are several without which it would not be possible to produce advanced types of semiconductors in the world today. These include a group of five very well-known companies, each of which has a dominant global position in its particular field, and which together operate more or less as oligopolies. These are Lam Research, Applied Materials, KLA Corporation, ASML, and Tokyo Electron. At the end of the year, we benefited from a significant correction in the share prices of Applied Materials and Lam Research, and, together with KLA Corporation, we now own three of them. We view these as one collective investment into a critical point within a very important segment of the global economy that is growing and will continue to grow over the long term…” (Click here to read the full text)
6. Parker-Hannifin Corp. (NYSE:PH)
Share Price as of January 19: $669.46
Surge in Share Price in 5 Years: 223.41%
Stock Split Confirmed: No
Number of Hedge Fund Holders: 62
Parker-Hannifin Corp. (NYSE:PH) is an industrial company that mainly operates in two main segments. One is the aerospace systems, which provide engine and actuation components. The other is diversified industrial, which serves a range of end markets.
The company’s Aerospace Systems segment delivered record sales of $4.9 billion in FQ1 2025, with organic growth of 1.4% from a year-ago period. This segment benefits from demand in both commercial and defense markets. These include parts for commercial aircraft, military defense, business jets, and helicopters. It’s further fueled by the expanding aftermarket business, which now accounts for 50% of total Aerospace sales, and the recent Meggitt acquisition, which has strengthened service offerings.
Looking ahead, this segment is expected to drive more growth, with the company forecasting 10% organic growth for the sector. As defense spending increases and global economies recover, Aerospace Systems will remain a critical contributor. Goldman Sachs adjusted the price target for Parker-Hannifin Corp. (NYSE:PH) from $818 to $815 while maintaining a buy rating on January 16.
Diamond Hill Mid Cap Strategy stated the following regarding Parker-Hannifin Corporation (NYSE:PH) in its Q3 2024 investor letter:
“Other top Q3 contributors included Parker-Hannifin Corporation (NYSE:PH) and Ciena Corporation. Diversified industrial and aerospace manufacturer Parker-Hannifin is capitalizing on strength in its aerospace business to drive better-than-expected results against a challenging macroeconomic backdrop that has weighed on peers’ results.”
5. ASML Holding NV (NASDAQ:ASML)
Share Price as of January 19: $756.33
Surge in Share Price in 5 Years: 152.08%
Stock Split Confirmed: No
Number of Hedge Fund Holders: 64
ASML Holding NV (NASDAQ:ASML) provides advanced semiconductor equipment systems. The company specializes in cutting-edge technologies like extreme ultraviolet (EUV) and deep ultraviolet (DUV) lithography systems, as well as metrology tools to ensure chip quality.
The company maintains a near-monopoly status in EUV technology. This helps create tiny features on silicon chips required for advanced applications like AI, 5G, and high-performance computing. EUV machines are costly and often exceed $300 million per unit. In Q3 2024, ASML Holding NV (NASDAQ:ASML) made €5.9 billion in total revenue, with €2.1 billion of that coming from EUV sales.
However, the company faces challenges due to US export controls tied to the US-China rivalry. While it has historically sold its DUV lithography machines to China, the sale of its EUV machines remains restricted. In 2023, China accounted for 29% of ASML’s total sales, but this is projected to decrease to ~20% by 2025 due to the restrictions. Additionally, ASML Holding NV (NASDAQ:ASML) expects to ship fewer than 50 EUV tools globally in 2025, a decrease from earlier projections made in 2022.
The company remains relevant due to investments from the US government, especially under the CHIPS and Science Act. This allocates around $52 billion for semiconductor manufacturing and research in the US. In December 2024, BNP Paribas Exane began coverage of the company with an Outperform rating and €817 price target, citing its market dominance and a projected 6% revenue increase by 2030.
Impax Global Environmental Markets Fund believes that the concerns about ASML Holding NV’s (NASDAQ:ASML) stock price due to potential US export restrictions to China are overstated, given its market dominance in EUV lithography. This is what the firm said regarding the company in its Q3 2024 investor letter:
“ASML Holding N.V. (NASDAQ:ASML) (Efficient IT, Netherlands) similarly to other semiconductor production-equipment makers, the share price has been under pressure on speculation the US may impose additional restrictions on China’s access to semiconductors and equipment. In addition, Intel’s results raised investors’ concerns that ASML would be disproportionately affected by a cutback on capex at Intel, which is a significant customer. The investment team believes these concerns are largely overblown given ASML’s dominant position in extreme ultraviolet (EUV ) lithography for advanced chips, which is where current investment is focused.”
4. Costco Wholesale Corp. (NASDAQ:COST)
Share Price as of January 19: $943.19
Surge in Share Price in 5 Years: 209.57%
Stock Split Confirmed: No
Number of Hedge Fund Holders: 75
Costco Wholesale Corp. (NASDAQ:COST) is a membership-only big-box retailer that offers a variety of products at bulk prices. Its membership models allow the company to provide lower prices to its members, which makes it a popular destination for shoppers seeking value and convenience. The product offerings include groceries, electronics, clothing, and household goods, among others.
The company’s growth in FQ1 2025 was primarily fueled by its expansion of new warehouses, with seven locations opened in FQ1 alone. This includes a record-setting $2.9 million in sales at its 897th warehouse in Pleasanton. With 29 total openings planned for the year, including 10 internationally, this expansion is a major contributor to Costco Wholesale Corp.’s (NASDAQ:COST) 7.5% increase in net sales in FQ1.
E-commerce also continues to grow, with nearly one million deliveries in FQ1 through Costco Wholesale Corp. (NASDAQ:COST) Logistics, which boosts online sales. Membership growth remains strong, with 7.6% more paid members, totaling 77.4 million. Innovations like prescription delivery and expanded travel services further support its sustained growth, positioning the company for long-term success.
Telsey Advisory Group maintained an outperform rating for the company with a price target of $1,100 as of January 9, due to expectations of strong sales growth, robust e-commerce performance, and strategic store expansions. Parnassus Core Equity Fund stated the following regarding Costco Wholesale Corporation (NASDAQ:COST) in its Q2 2024 investor letter:
“Costco Wholesale Corporation (NASDAQ:COST) posted strong results for the third quarter of fiscal 2024, with a robust increase in net sales and strength in both U.S. and international markets. Bucking the trend of weakening demand for discretionary items that has pressured many other retailers, Costco reported growth in nonfood sales.”
3. Tesla Inc. (NASDAQ:TSLA)
Share Price as of January 19: $426.50
Surge in Share Price in 5 Years: 1153.31%
Stock Split Confirmed: No
Number of Hedge Fund Holders: 99
Tesla Inc. (NASDAQ:TSLA) is a technology company that manufactures electric vehicles, energy storage systems, and solar panels. Some of its well-known electric cars include the Model 3, Model Y, Model S, Model X, and the Cyber Truck. Investor optimism in the company is growing due to advancements in AI, particularly in autonomous driving and robotics.
On January 16, Goldman Sachs maintained its Neutral rating and $345 price target on the company, noting its $1.37 trillion market cap. The firm is optimistic about Full Self-Driving (FSD) but cautioned that progress will take time. It revised its forecast to include FSD and robotaxi revenue, with robotaxi expected to generate $115 million in 2027 but have a neutral impact on earnings initially. The firm expects growing FSD monetization and improved gross margins by 2026-2027.
The company has made strides in autonomous technology by achieving a 1000x improvement in miles driven without human intervention for its Full Self-Driving (FSD) software since January 2024. Additionally, it demonstrated 20 Cybercabs operating autonomously without any human input. Investor interest has also surged around Tesla Inc.’s (NASDAQ:TSLA) robotaxi, which is a fully autonomous vehicle designed for a ride-hailing service. It is scheduled for launch in mid-2025.
2. Eli Lilly And Co. (NYSE:LLY)
Share Price as of January 19: $725.72
Surge in Share Price in 5 Years: 419.93%
Stock Split Confirmed: No
Number of Hedge Fund Holders: 106
Eli Lilly And Co. (NYSE:LLY) is a pharmaceutical company that discovers, develops, and markets human medications. The company’s growth is mainly driven by the increasing demand for weight loss and diabetes treatments. It has a strong pipeline of glucagon-like peptide-1 (GLP-1) receptor agonist drugs. This means that it helps manage diabetes and weight by affecting certain hormones in the body.
In FQ4 2024, the company’s weight-loss drug sales fell short, with Mounjaro revenue at $3.5 billion (vs. the $5.35 billion estimate) and Zepbound at $1.9 billion (vs. the $2.08 billion estimate). This was due to slower-than-expected US demand and low inventories. However, the company expects 2025 revenue of $58 billion to $61 billion, surpassing analysts’ estimate of $58.52 billion. Despite recent stock declines, Eli Lilly And Co. (NYSE:LLY) is up 16% over the past year.
Despite this, Eli Lilly And Co. (NYSE:LLY) is still on track for 32% annual revenue growth in 2025. With its oncology business growing and treatments for Alzheimer’s and eczema yet to reach full scale, the dip in stock price offers a potentially good investment opportunity. The company is also investing $1.8 billion to expand its manufacturing facilities in Limerick and Kinsale, Ireland. These are efforts to meet the growing demand for incretin therapeutics and produce Kisunla, its newly approved Alzheimer’s treatment.
1. Netflix Inc. (NASDAQ:NFLX)
Share Price as of January 19: $858.10
Surge in Share Price in 5 Years: 152.63%
Stock Split Confirmed: No
Number of Hedge Fund Holders: 121
Netflix Inc. (NASDAQ:NFLX) is an entertainment company that streams TV shows, movies, documentaries, and games in several genres and languages on internet-connected devices. It has invested billions in original content and secured deals with major stars to enhance its streaming library.
In the third quarter of 2024, the company experienced strong subscriber revenue growth, due to an expanding member base and high engagement levels. This growth is expected to continue into 2025, with Netflix Inc. (NASDAQ:NFLX) projecting $43 billion to $44 billion in revenue, which reflects a 15% year-over-year increase. Most of this growth will come from solid net subscriber additions, supported by the company’s 2025 content slate, which includes new seasons of Stranger Things and Squid Games.
With millions of untapped households, Netflix Inc. (NASDAQ:NFLX) expects continued membership growth, further supported by price increases and strong content. Additionally, the Average Revenue Per Member (ARM) will rise, and while the ad-supported plan isn’t a primary driver of growth for the company yet, its revenue is expected to double in 2025.
On January 15, BMO Capital Markets raised its price target to $1,000, due to growth prospects driven by its ad-supported video-on-demand (AVOD) platform, which has seen significant user growth, now reaching 70 million monthly active users. The firm expects this to grow to 90 million by 2025, with increasing ad frequency and stronger engagement from content like WWE.
While we acknowledge the growth potential of Netflix Inc. (NASDAQ:NFLX), our conviction lies in the belief that AI stocks hold great promise for delivering high returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than NFLX but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and Complete List of 59 AI Companies Under $2 Billion in Market Cap.
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