History Says the Nasdaq Will Surge in 2026. 2 Stock-Split Stocks to Buy Before It Does.

The Nasdaq Composite (NASDAQINDEX: ^IXIC) is in the throes of a bull market that's been running for more than three years and shows no signs of slowing. The potential for additional interest rate cuts, rising corporate profits, and the increasing adoption of artificial intelligence (AI) have all added to Wall Street's bullish sentiment. Furthermore, the longevity of the current upturn suggests there's still more to come.

Going back 50 years, only five bull markets have lasted at least three years, and each one continued to gain ground, according to Ryan Detrick, chief market strategist at financial services company Carson Group. His data show that bull markets that surpassed the three-year mark continued to rally, with an average duration of eight years, and even the shortest lasting five years. This suggests there's likely more to come.

A resurgence in the popularity of stock splits is adding fuel to the fire, as investors are showing renewed interest in companies that have split their shares. Stock splits are historically preceded by strong business and financial results, which drive significant stock price gains.

Let's review two long-term winners that might be worth a second look.

Image source: Netflix.

1. Netflix

One company investors should have on their watch list is Netflix (NASDAQ: NFLX). The stock has delivered gains of 26% thus far in 2025 and is up 862% over the past decade (as of this writing). This impressive long-term track record prompted management to declare a 10-for-1 stock split -- the first since 2015 -- completed earlier this month.

Despite the company's robust gains in recent years, there's reason to believe the streaming pioneer has room to run. Stock splits are generally a bullish sign from management, signaling their confidence that the business has green pastures ahead. It's also well established that winners tend to keep winning.

Companies that enact stock splits see their shares increase by 25%, on average, in the year after the announcement, according to data provided by Bank of America analyst Jared Woodard. That's more than double the 12% average gain for the S&P 500 (SNPINDEX: ^GSPC) during the same period.

Stock split aside, there are other reasons to be bullish on Netflix. The company's ongoing foray into advertising continues to pay dividends. Ad revenue is expected to double in 2025, "off a relatively small base," and the third quarter marked its "best ad sales quarter ever," reaching more than 190 million viewers.

Netflix continues to reap the rewards of its global phenomenon animated movie, KPop Demon Hunters. It's the company's most popular movie ever and continues to rack up new records, spending 20 weeks in the streamer's Top 10. Furthermore, Golden, one of several hit songs from the movie, has spent 15 weeks at the top of the global charts. The buzz surrounding this blockbuster has proven resilient and is undoubtedly attracting new streaming subscribers to Netflix.

These successful strategies are fueling robust results. In the third quarter, Netflix generated revenue of $11.5 billion, up 17% year over year. Excluding a one-time, noncash charge, its earnings per share (EPS) jumped 27%. Management expects Q4 revenue to increase 17% to $11.96 billion and EPS to climb 28% to $5.45.

Netflix stock is currently selling for 35 times next year's expected sales. While that's a premium, I'd argue that given the company's track record, it's richly deserved.

2. Interactive Brokers

Another long-term winner investors should have on their short list is Interactive Brokers (NASDAQ: IBKR). The stock has gained 45% thus far in 2025 and is up 512% over the past 10 years (as of this writing). These gains prompted the company to initiate a 4-for-1 stock split, which was completed in June. Despite its impressive history of growth, there could be much more to come.

Interactive Brokers has had a keen focus on technology and increasing the ease of use for investors on its platform. A look at a few of the low-cost brokerage's key metrics tells a compelling story.

Customer brokerage accounts climbed 32% year over year to 4.13 million in Q3, while customer equity jumped 40% to $758 billion. Daily active revenue trades, or customer transactions, increased 34% to 3.62 million. These metrics show that not only are investors gravitating to its platform, but they are also increasing their trades and balances.

This is fueling strong financial results. In the third quarter, Interactive Brokers generated revenue that grew 21% year over year to $1.6 billion. This resulted in EPS that climbed 40% to $0.59. The results were well ahead of Wall Street's expectations.

Despite the company's impressive record of growth, the stock is surprisingly affordable, selling for just 31 times trailing-12-month earnings. The company's solid fundamentals, long track record of success, and reasonable valuation underscore why Interactive Brokers is a buy.

Bank of America is an advertising partner of Motley Fool Money. Danny Vena, CPA has positions in Netflix. The Motley Fool has positions in and recommends Interactive Brokers Group and Netflix. The Motley Fool recommends the following options: long January 2027 $43.75 calls on Interactive Brokers Group and short January 2027 $46.25 calls on Interactive Brokers Group. The Motley Fool has a disclosure policy.