We recently published a list of 12 Best QQQ Stocks to Invest in Now. In this article, we are going to take a look at where Netflix Inc. (NASDAQ:NFLX) stands against other best QQQ stocks to invest in now.
Lunch’ to analyze the market’s reaction to the tariff announcements. McCartney referred to the situation as tariff policy ping pong, and highlighted how it adds to the uncertainty in Washington during a time when weak data is emerging from other areas. She explained that this has created a perfect storm of challenges, which includes seasonal pressures that make this time of year difficult. Retail buyers have stepped away from the market, and there is uncertainty for individuals regarding tax policy and for corporations concerning tariffs and taxes. The withdrawal of overleveraged bids has contributed to increased market volatility, which makes it harder for major tech companies to maintain their leadership roles.
The conversation then turned to the influence of key sectors, particularly the MAG7. McCartney noted that when these sectors underperform, they can generate downside pressure on the market, which contrasts with the desire for a broader market trade. She pointed out that while these tech stocks are down year-to-date, the overall market remains materially up and is annualizing at a high single-digit rate. She expressed optimism about market breadth and suggested that this could present a buying opportunity for investors to re-enter big tech.
Tech stocks face short-term volatility due to market uncertainty, but their long-term potential remains intact.
Methodology
We sifted through the Invesco QQQ exchange-traded fund (ETF) holdings to find 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 Q4 2024. The hedge fund data was sourced from Insider Monkey’s database which tracks the moves of over 900 elite money managers.
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 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
A home theater with family members enjoying streaming content together.
Netflix Inc. (NASDAQ:NFLX)
Number of Hedge Fund Holders: 144
Netflix Inc. (NASDAQ:NFLX) offers a library of TV series, films, documentaries, and games across diverse genres and languages. Through its streaming platform, which is accessible on various internet-connected devices, it delivers entertainment to members in about 190 countries.
The company has seen remarkable adoption of its ad-supported plan, with over 55% of new sign-ups in ad-supported countries opting for this tier. The company’s ad-supported plan offers a lower-priced subscription option to consumers in exchange for viewing advertisements during their streaming experience. Viewer engagement on the ad-supported plan is on par with the standard and non-ad-supported plan, which indicates that viewers are finding value in the ad-supported experience.
In Q4 2024, ad revenue doubled year-over-year, and Netflix Inc. (NASDAQ:NFLX) projects it will double again in 2025. The company is scaling up and enhancing its ad tech to capitalize on the growing demand. A crucial step in this process is the rollout of the company’s own ad stack, which starts with the US in April. This move is designed to improve the buyer experience and offer flexibility to advertisers. It ultimately aims to capture a larger share of the over $25 billion connected TV ad spend market.
The company’s strong earnings, subscriber growth from new initiatives, and optimistic financial projections made it a top contributor to the RiverPark Large Growth Fund’s performance. The fund stated the following regarding Netflix Inc. (NASDAQ:NFLX) in its Q4 2024 investor letter:
“Netflix, Inc. (NASDAQ:NFLX): NFLX was a top contributor in the fourth quarter powered by a 3Q earnings report that included stronger-than-expected revenue and operating income, solid subscriber additions, and positive forward commentary. Anti-password sharing and ad tier initiatives continue to drive subscriber growth while improving revenue per user trends, from recent price increases, drive margin expansion. The company was optimistic about future revenue growth, margin expansion, free cash flow generation and future return of capital programs.
The recent re-acceleration of subscriber growth, plus price increases on premium memberships and a stabilization of content investments, should position the company for low double digit annual revenue growth over the next few years while driving operating margin to more than 25%. We also believe that the stabilization of content spend should allow the company to continue to scale its free cash flow.”
Overall, NFLX ranks 8th on our list of best QQQ stocks to invest in now. While we acknowledge the growth potential of NFLX, our conviction lies in the belief that AI stocks hold great promise for delivering high returns and doing so within a shorter time frame. 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.
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Disclosure: None. This article is originally published at Insider Monkey.
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