Netflix defies the slump in the large tech companies

The streaming video gigant is considered to be well positioned to survive the turbulence at the financial markets, since the direct effects of the tariffs are limited and the aspiring advertising business ensures permanent growth. In addition, Netflix’s subscriptions are seen as one of the last things that will terminate consumers in a recession, which suggests a high degree of resistance, even if the economic conditions deteriorate.

This has contributed to the fact that the share is one of the big winners this year with an increase of almost eight percent. In contrast, every member of the so -called « Magnificent Seven », the group of technology values, has lost more than 20 percent of its high. The results that were upcoming on Thursday (New York time) were able to consolidate Netflix’s reputation as an oasis of security in the middle of the general volatility.

Terminations not planned

“Netflix is ​​from the whole customs chaos What has been spared and is characterized by fundamental trends such as user growth, profitability and advertising revenue, ”says Alonso Munoz, Chief Investment Officer at Hamilton Capital Partners.“ At the same time, it has great content and the lowest subscription level does not cost too much, which means that it is one of the last editions that are saved by people. there that can continue to develop above average. « 

Apart from the fact that the stock is protected against short -term headwinds, Wall Street also poses the long -term potential of the company. At the beginning of this week, the Wall Street Journal reported that Netflix wants to double its sales by 2030 and triple its operating result, which is due to both user growth and advertising revenue. Analysts consider these goals to be reached.

According to the report, Netflix also wants to achieve a market capitalization of one trillion dollar by 2030; At the end of the IPO on Wednesday, the company was rated at around $ 411 billion. This year, the stock has slightly exceeded Nasdaq 100 and competitors Walt Disney and Warner Brothers Discovery. In the meantime, the Alphabet share, a streaming giant who owns YouTube, gave in 19 percent in 2025.

Many expect a recession

A large part of the recent weakness on the stock markets is due to the customs policy of the Trump government, which has tightened the tensions with important trading partners. A monthly survey by Bank of America Corp. shows that the mood in terms of economic outlook is as negative as it has not been in 30 years. Many survey participants expect a recession.

Since advertising is generally considered to be correlated with economic growth, Netflix could be affected by a shrinkage. Nevertheless, the company should benefit from the continued shift of advertising budgets to streaming.

« At the same time, the value of television for consumers increases in recessions, » said Jason Helfstein, analyst at Oppenheimer. He pointed out that Netflix’s international subscribers grew faster during the recession in the European Union in 2012 than in the previous year, a sign that demand remains stable even if the consumers are otherwise withdrawing.

David Joyce from Seaport Global Securities wrote that Netflix offers « the best of both worlds » against the current background. « The investors have recognized that Netflix offers both defensive properties (one of the cheapest forms of entertainment on a pro-hour engagement basis, we should get into a recession) as well as strong secular growth, » wrote Joyce and confirmed a purchase recommendation for the share.

Profit rally

The Netflix share has recovered sharply after the last two results reports. In January, when the company reported the largest quarterly subscriber increase in its history and announced price increases, the stock rose by almost ten percent.

While Netflix will no longer publish quarterly subscribers, a sales increase of twelve percent and an increase in net profit of 7.6 percent is expected for the current quarter, as the data compiled by Bloomberg shows. For the year as a whole, growth of over ten percent is expected for both 2025 and the following two years.

Geetha Ranganathan von Bloomberg Intelligence wrote that the company’s lead in the area of ​​streaming was « insurmountable » and that « the narrative shifts from the exclusive concentration on the subscribers to double -digit sales gains as well as an expansion of the margin and free cashflow. »

The widespread optimism towards Netflix indicates that expectations are too high, and the share is acted with 36 times the estimated profits, which reflects the increasing profitability of the company. This is a considerable surcharge towards the competitors and makes the stock one of the most expensive titles in the S&P 500 Communication Services Sector Index.