Netflix (NFLX) Declined in Q3 on Profit Taking

Sands Capital, an investment management company, released its “Sands Capital Select Growth Strategy” Q3 2025 investor letter. A copy of the letter can be downloaded here. U.S. large-cap growth equities continued to recover from a sharp sell-off in early April. Strong corporate earnings, investor enthusiasm around artificial intelligence (AI), and growing expectations for Federal Reserve policy easing drove the robust gains. The portfolio returned 6.3% (net) in the quarter, compared to the benchmark’s 10.5% gain. You can check the fund’s top 5 holdings to know more about its best picks for 2025.

In its third-quarter 2025 investor letter, Sands Capital Select Growth Strategy 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 -3.55%, and its shares gained 20.98% of their value over the last 52 weeks. On November 26, 2025, Netflix, Inc. (NASDAQ:NFLX) stock closed at $106.14 per share, with a market capitalization of $449.749 billion.

Sands Capital Select Growth Strategy stated the following regarding Netflix, Inc. (NASDAQ:NFLX) in its third quarter 2025 investor letter:

“Netflix, Inc. (NASDAQ:NFLX) is the world’s largest producer and distributor of streaming video content, based on content investment and subscriber count. Shares declined in the third quarter after strong first-half performance in 2025 pushed its forward earnings multiple to the highest level since 2022, leading to some profit-taking. Fundamentally, the business continues to execute well. Netflix raised full-year revenue guidance by $700 million at the high end, citing stronger subscriber growth, improved ad performance, and a weaker U.S. dollar. It also raised operating margin guidance by 1 percentage point to 30 percent. We view this as conservative, given the lack of any significant increase in operating expenses. The guidance implies a slowdown in margin expansion for the second half of 2025, which contrasts with over 6 percentage points of expansion in 2024 and more than 5 percentage points in 2025’s first half. Our proprietary survey results results continue to validate our thesis, with Netflix leading in engagement, retention, content quality, and perceived value.”

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 Loomis Sayles Global Growth Fund’s views on the company. In addition, please check out our hedge fund investor letters Q3 2025 page for more investor letters from hedge funds and other leading investors.

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