Do You Think Netflix (NFLX) is a Compelling Investment?

Fred Alger Management, an investment management company, released its “Alger Spectra Fund” third-quarter 2025 investor letter. A copy of the letter can be downloaded here. U.S. equity markets continued their upward trajectory in the third quarter, with the S&P 500 Index rising 8.12%. A combination of improving economic conditions, solid corporate earnings, and growing expectations for monetary easing drove the strong performance. Against this backdrop, Class A shares of the Fund outperformed the Russell 3000 Growth Index during the third quarter of 2025. In addition, please check the fund’s top five holdings to know its best picks in 2025.

In its third-quarter 2025 investor letter, Alger Spectra Fund highlighted stocks such as Netflix, Inc. (NASDAQ:NFLX). Incorporated in 1997, Netflix, Inc. (NASDAQ:NFLX) is an entertainment services provider. The one-month return of Netflix, Inc. (NASDAQ:NFLX) was -7.84%, and its shares gained 36.68% of their value over the last 52 weeks. On November 10, 2025, Netflix, Inc. (NASDAQ:NFLX) stock closed at $1,120.07 per share, with a market capitalization of $474.61 billion.

Alger Spectra Fund stated the following regarding Netflix, Inc. (NASDAQ:NFLX) in its third quarter 2025 investor letter:

“Netflix, Inc. (NASDAQ:NFLX) is a global leader in streaming entertainment, delivering premium video content through a subscription-based platform that now includes an advertising-supported tier and selective live-event programming. We find Netflix to be a compelling investment for its ability to sustain strong engagement at scale, its pricing power, and its expansion into new revenue streams such as advertising and live events. In our view, management’s emphasis on consistent revenue growth and profitability, rather than headline subscriber metrics, supports a more predictable financial profile. During the quarter, shares declined as investors looked past strong fiscal second-quarter results and focused on full year guidance and second-half profitability. Management’s full-year revenue raise was attributed largely to foreign-exchange tailwinds rather than stronger underlying demand, which disappointed expectations following strong year-to-date performance. Moreover, commentary around higher content and marketing investment in the second half of 2025 tempered margin expectations, adding to investor concerns. Despite these near-term headwinds, we believe Netflix remains well positioned due to its global scale, advertising initiatives, and selective expansion into live programming.”

Netflix, Inc. (NFLX): Not An Analyst Who Isn't Buying Netflix, Says Jim Cramer

Netflix, Inc. (NASDAQ:NFLX) is in 14th position on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 133 hedge fund portfolios held Netflix, Inc. (NASDAQ:NFLX) at the end of the second quarter, compared to 150 in the previous quarter. While we acknowledge the risk and potential of Netflix, Inc. (NASDAQ:NFLX) as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than Netflix, Inc. (NASDAQ:NFLX) and that has 10,000% upside potential, check out our report about this cheapest AI stock.

In another article, we covered Netflix, Inc. (NASDAQ:NFLX) and shared the list of best stocks to invest in according to billionaire D.E. Shaw. In addition, please check out our hedge fund investor letters Q3 2025 page for more investor letters from hedge funds and other leading investors.

READ NEXT: The Best and Worst Dow Stocks for the Next 12 Months and 10 Unstoppable Stocks That Could Double Your Money.

Disclosure: None. This article is originally published at Insider Monkey.