Is NFLX a good stock to buy? We came across a bullish thesis on Netflix, Inc. on Nikhs’s Substack. In this article, we will summarize the bulls’ thesis on NFLX. Netflix, Inc.’s share was trading at $82.18 as of June 5th. NFLX’s trailing and forward P/E were 26.51 and 25.58 respectively according to Yahoo Finance.
Netflix, Inc. provides entertainment services worldwide. NFLX’s Q1’26 earnings reinforced a stronger trajectory than the market reaction implied, as the company transitioned from “Entertainment OS” toward “Attention OS” integrating streaming, live programming, games, podcasts, and discovery into a unified engagement platform.
Read More: 15 AI Stocks That Are Quietly Making Investors Rich
Read More: Undervalued AI Stock Poised For Massive Gains: 10000% Upside Potential
Although Q2 guidance disappointed across revenue, EPS, and margins, underlying fundamentals remained robust with 16% revenue growth, 18% operating income growth, and a significant free cash flow beat, reinforcing the view that short-term guidance noise masked long-term structural acceleration.
The abandonment of a potential Warner library acquisition clarified management’s conviction that engagement depth can be solved organically rather than through large content deals, with live events, pricing sophistication, and product expansion forming the second flywheel alongside the core subscription engine. Netflix’s ad-supported tier is scaling, with ad revenue on track for $3 billion 2026, rising advertiser adoption, and programmatic expansion, positioning ads as second monetization layer that could re-rate the business from a traditional media multiple toward a platform valuation.
Meanwhile, aggressive share buybacks, including $1.3 billion deployed in a short period, signal strong management confidence and enhance per-share compounding. Despite near-term margin guide conservatism, structural operating leverage remains intact as content amortization peaks and engagement rises.
The investment debate is increasingly centered on whether Netflix can convert attention dominance into durable multi-stream monetization, particularly against competitors like YouTube and short-form platforms. At current trading levels the stock reflects a high-quality streamer, but not yet a scaled attention platform, implying meaningful re-rating upside if ads and engagement expansion continue compounding over several years.
Previously, we covered a bullish thesis on Netflix, Inc. (NFLX) by Oliver | MMMT Wealth in October 2024, which highlighted diversification into live events, gaming, advertising expansion, and international growth driving TAM expansion. NFLX’s stock price has appreciated by approximately 8.89% (adjusted for stock split) since our coverage. Nikhs’s Substack shares a similar view but emphasizes the shift from Entertainment OS to Attention OS, ad flywheel, and platform re-rating via engagement monetization.
Netflix, Inc. is on our list of the 40 Most Popular Stocks Among Hedge Funds. As per our database, 144 hedge fund portfolios held NFLX at the end of the first quarter which was 146 in the previous quarter. While we acknowledge the risk and potential of 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 NFLX and that has 10,000% upside potential, check out our report about this cheapest AI stock.
Disclosure: None.
