Netflix, Inc. (NASDAQ:NFLX) is one of the stocks that Jim Cramer shared thoughts on. Cramer called the company “best of breed streaming platform,” as he commented:
“Coming into the quarter, Netflix had been on fire, up a whopping 43% year to date. I even ran a segment defending the stock when it pulled back from its highs in April. After that, it rallied 29% before the company reported last week. But then, after the numbers came out on Thursday night, Netflix’s stock tumbled 5% the next day before erasing some of that loss today, but not all of it… Once again, you’re given a chance to buy a terrific stock at a discount…
Because of these great results, Netflix was able to raise their full-year revenue outlook by $1 billion at the midpoint. Management also gave great guidance for the current quarter. So why on earth did this stock plunge 5% on Friday? Now, part of it comes down to great expectations… With the stock up 43% for the year, going into the print, sometimes even a beat and raise quarter just isn’t enough. But part of it relates to some legitimate worries about engagement…
Netflix said its users have watched 95 billion hours of content this year…That gave the bears enough ammo to argue that future growth for the streaming giant could indeed be slowing. Okay, I think that’s shortsighted. Netflix’s content slate for 2025 is heavily weighted to the second half of the year. This, combined with membership growth picking up late in the second quarter… sets the stage for a strong second half…
At the same time, Netflix is seeing great success… for local content strategy… Management estimates that Netflix has contributed $125 billion to the US economy from 2020 to 2024… Meanwhile, their ad business is scaling rapidly. Netflix ad suite, their proprietary first-party ad tech platform, has rolled out globally, and management expects ad revenues to roughly double this year, double…
The bottom line: Netflix sold off after the quarter because the stock came in too hot, and the conference call only made me feel more confident about the future of the business, so did, by the way, the Q&A. I think you’re getting a chance to own the best-of-breed streaming platform at a discount. Please read both the shareholder letter and the Q&A to be sure you don’t make a mistake.”
venti-views-lI7dlA5VBp8-unsplash
Netflix (NASDAQ:NFLX) delivers entertainment through TV shows, films, documentaries, and games. The company allows users to stream content through internet-connected devices.
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.
READ NEXT: 30 Stocks That Should Double in 3 Years and 11 Hidden AI Stocks to Buy Right Now.
Disclosure: None. This article is originally published at Insider Monkey.
Hedge Fund Resource Center