by Ryan Vlastelica
Audiences worldwide turn to Netflix for escapism. Wall Street is doing the same.
The streaming-video giant is seen as well positioned to weather the turmoil roiling financial markets, given limited direct impact from tariffs and a nascent advertising business that’s fueling durable growth. In addition, Netflix Inc. subscriptions are viewed as one of the last things consumers will cancel in a recession, suggesting a high level of resilience even if economic conditions worsen.
That’s helped make the stock a high-profile gainer this year, with a rise of nearly 8%. In contrast, every member of the so-called Magnificent Seven group of technology stocks is down more than 20% from their peaks. And results due after Thursday’s market close could cement its reputation as an oasis of safety amid broader volatility.
“Netflix is sheltered from all the tariff chaos, and it stands out on fundamental trends like user growth, profitability, and ad revenue,” said Alonso Munoz, chief investment officer at Hamilton Capital Partners. “At the same time, it has great content and its lowest subscription tier doesn’t cost all that much, which means it’s one of the last expenses people will cut. All that points to a stock that can continue to outperform.”
Beyond its insulation from near-term headwinds, Wall Street is also positive on the firm’s long-term potential. Earlier this week, the Wall Street Journal reported that Netflix aims to double its revenue and triple its operating income by 2030, fueled by both user growth and advertising revenue. Analysts say such targets are achievable.
Netflix is also looking to reach $1 trillion in market capitalization by 2030, according to the report; it was valued at around $411 billion as of Wednesday’s close. The stock has easily outperformed the Nasdaq 100 as well as peers Walt Disney Co. and Warner Brothers Discovery Inc. this year. Meanwhile, Alphabet Inc., a streaming giant in its own right through its ownership of YouTube, is down 19% in 2025.
Much of the recent weakness across stock markets stems from the Trump administration’s tariff policies that have escalated tensions with key trading partners. Investors are also increasingly gloomy over the outlook, with a monthly survey by Bank of America Corp. showing sentiment toward economic prospects at the most negative in 30 years. Many survey respondents are bracing for recession.
Given that advertising is generally seen as correlated with economic growth, Netflix could expect some impact from a contraction. Nonetheless, it should still benefit from the ongoing shift of ad budgets toward streaming.
At the same time, the “consumer value of TV increases during recessions,” according to Oppenheimer analyst Jason Helfstein. He noted that Netflix’s international subscriber additions grew at a more rapid pace during the European Union recession in 2012 than in the previous year, a sign that demand holds steady even if consumers are otherwise pulling back. Netflix also saw rapid growth in the Covid pandemic recession, although that was amplified by shelter-in-place trends.
Seaport Global Securities’ David Joyce wrote that Netflix offers “the best of both worlds,” for the current backdrop.
“Investors have recognized that Netflix offers defensive characteristics (one of the cheapest forms of entertainment on a per-hour engagement basis, should we enter a recession) as well as strong secular growth,” Joyce wrote, affirming a buy rating on the stock.
Netflix stock rallied hard after its two previous earnings reports. It rose nearly 10% in January, when it reported its biggest quarterly subscriber gain in history and announced price increases, and it gained even more in October. The stock typically sees a swing of 9.4% in the day after results, according to data compiled by Bloomberg, and the options market is looking for a move around 8.5% this time. This report comes ahead of the Good Friday market holiday in the US.
While Netflix will no longer report quarterly subscriber numbers, revenue this quarter is seen rising 12% while net earnings grow 7.6%, data compiled by Bloomberg shows. Full-year growth is expected to be above 10% both in 2025 and for the subsequent two years.
Bloomberg Intelligence’s Geetha Ranganathan wrote that the company’s lead in streaming is “insurmountable,” and that “the narrative is shifting to double-digit revenue gains, as well as widening margin and free cash flow, from its focus only on subscribers.”
The broad optimism toward Netflix suggests expectations may be elevated, and the stock trades around 36 times estimated earnings, a reflection of the company’s improving profitability. That’s a sizeable premium to peers, making it one of the most expensive names in the S&P 500 Communication Services Sector Index.
“I can see why people are optimistic, and Netflix should trade at a premium, since the growth and quality you get here is a lot stronger than other streaming names,” said Uday Cheruvu, portfolio manager at Harding Loevner. “Netflix caters to so many types of user taste that it is far less susceptible to churn than peers. For an investor, that means if you have to buy just one, Netflix is it.”
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