Market Overview - The bull run in Wall Street that began in early 2023 faced challenges last month, primarily due to a significant rally in the technology sector driven by generative AI growth [1] - Market participants have experienced increased pain, with U.S. stock markets in negative territory year-to-date and the Nasdaq Composite in correction [2] - Key factors contributing to this downturn include overstretched valuations of AI stocks, recession fears in the U.S. economy, uncertainty regarding future interest rate cuts by the Fed, and competition from low-cost generative AI platforms from China [3] AI-Powered Non-Tech Stocks - Five non-tech companies utilizing extensive AI applications are recommended for investment: PayPal Holdings Inc. (PYPL), Visa Inc. (V), Upstart Holdings Inc. (UPST), Netflix Inc. (NFLX), and Johnson Controls International plc (JCI) [4][5] PayPal Holdings Inc. (PYPL) - PYPL is experiencing robust growth in total payment volume, with improved customer engagement and rising adoption rates across platforms [7] - The company leverages AI to enhance transaction efficiency and consumer insights, with platforms like Fastlane and Ads providing a technological edge [8] - Expected revenue and earnings growth rates for PYPL are 3.7% and 8% respectively, with a Zacks Consensus Estimate for earnings improving by 2.4% in the past 60 days [9] - PYPL's current valuation metrics indicate an attractive position compared to peers, with a forward P/E of 13.58X, P/S of 2.12X, and P/B of 3.30X [10] - The average price target suggests a potential increase of 36.2% from the last closing price of $68.62, indicating a maximum upside of 82.2% [11] Visa Inc. (V) - Visa's strategic acquisitions and alliances are driving long-term growth, with expected net revenue growth in low double-digits for fiscal 2025 [12] - The shift to digital payments and increased demand for AI-driven services, particularly in fraud prevention, are beneficial for Visa [13] - Visa has invested $3.5 billion over the past decade to enhance its data platform, preventing $40 billion in fraud attempts annually [14] - Expected revenue and earnings growth rates for Visa are 10.2% and 12.4% respectively, with a current dividend yield of 0.71% [15] - The average price target indicates a potential increase of 15.2% from the last closing price of $332.84, with a maximum upside of 23.2% [16] Upstart Holdings Inc. (UPST) - UPST operates as an AI lending platform, partnering with banks to provide affordable credit across various lending segments [17] - The company's AI-driven credit risk models allow for more approvals at lower APRs, enhancing efficiency and fraud detection [18] - Expected revenue and earnings growth rates for UPST are 59.3% and over 100% respectively, with earnings estimates improving significantly in the past 30 days [19] - The average price target suggests a potential increase of 61.5% from the last closing price of $49.66, indicating a maximum upside of 117.5% [21] Netflix Inc. (NFLX) - Netflix utilizes AI and machine learning to enhance user experience through personalized content recommendations [22] - The company reported strong engagement levels, with an average of two hours of viewing per member per day [22] - Expected revenue and earnings growth rates for Netflix are 14% and 24% respectively, with earnings estimates improving by 4% in the past 60 days [25] - The average price target indicates a potential increase of 20% from the last closing price of $919.68, suggesting a maximum upside of 62.4% [26] Johnson Controls International plc (JCI) - JCI is benefiting from strong demand in its Building Solutions segment, particularly in HVAC and security [27] - The company is investing in digital offerings, enhancing its AI capabilities through the OpenBlue platform [28] - Expected revenue and earnings growth rates for JCI are -11.9% and -1.9% respectively, with a current dividend yield of 1.92% [30] - The average price target suggests a potential increase of 23.4% from the last closing price of $78.68, indicating a maximum upside of 33.5% [31]

Core Viewpoint - The current market downturn presents opportunities for investors to acquire shares of strong companies like Netflix and Meta Platforms, especially if a full-blown market sell-off occurs. Group 1: Netflix - Netflix has shown significant growth, with Q4 revenue increasing by 16% year over year to $10.2 billion and earnings per share (EPS) more than doubling to $4.27 [4] - The company ended 2024 with 301.63 million paid subscriptions, a 16% increase from the previous year, enhancing its network effect and data utilization for content strategy [7] - Despite a high forward price-to-earnings (P/E) ratio of 34.8 compared to the industry average of 19.4, Netflix's strong performance and growth prospects make it an attractive option, particularly during a market downturn [5][6] Group 2: Meta Platforms - Meta Platforms has experienced robust growth, with Q4 revenue rising by 21% year over year to $48.4 billion and EPS increasing by 50% to $8.02 [10] - The company has 3.35 billion daily active users, a 5% increase year over year, and is enhancing user engagement through initiatives like Meta AI and Threads [11] - Meta's forward P/E ratio of 23.5 is considered fair, and its core advertising business remains strong, making its shares potentially attractive during a market downturn [13][14]

Steaming giant Netflix Inc NFLX could add another sports league to its growing lineup of sports content that includes NFL games, women's soccer and World Wrestling Entertainment.What Happened: Netflix saw huge demand with a boxing card featuring Mike Tyson and Jake Paul last year and for its first-ever NFL games on Christmas Day.In January, Netflix added WWE matches to its content of live sports.Another sport could be in the mix with Netflix among the interested media outlets in getting the rights to UFC fi ...

Core Viewpoint - Bank of America anticipates that several fundamentally strong technology companies will announce stock splits in 2025, which could enhance liquidity and accessibility for investors, potentially leading to significant price appreciation [2][3]. Group 1: Stock Split Trends - The popularity of stock splits in the technology sector has surged, with historical data indicating that stocks that undergo splits tend to grow between 25% and 30% in the year following the event, outperforming the S&P 500's average annual growth of 10% to 12% [2]. Group 2: Meta Platforms - Meta Platforms has seen its stock price increase by 219.8% over the past three years, despite a recent pullback of 13.6% from its 52-week high, making it a strong candidate for a stock split [4][5]. - In fiscal year 2024, Meta's revenues grew 22% year over year to $164.5 billion, with operating profit surging 48% to $69.4 billion, driven by its extensive ecosystem of apps [6]. - The company is leveraging advanced AI infrastructure to enhance digital advertising returns, with an 8% increase in advertisement quality and plans to process larger volumes of ads in the future [7]. - Meta AI is projected to reach over 1 billion users by 2025, providing valuable data to refine AI offerings and create new revenue streams [8]. - Meta plans to invest $60 billion to $65 billion in capital expenditures in 2025, primarily for AI infrastructure, which could yield significant long-term returns despite short-term concerns [9]. Group 3: Netflix - Netflix is positioned for a stock split in 2025, nearly a decade after its last split in 2015, with over 300 million paid memberships and an estimated global audience of over 700 million [10][11]. - The company's advertising business is growing, with ad-supported memberships increasing by 30% sequentially in Q4 of fiscal year 2024, and high user engagement is expected to attract more advertisers [12]. - Netflix reported a 16% year-over-year revenue increase to $39 billion, with operating margins expanding to 26.7% and net income rising by 61% to $8.71 billion, alongside significant cash flow generation [13]. - The strong financial performance and commitment to returning value to shareholders through share repurchases make Netflix a compelling investment in 2025 [14].

Core Insights - The individual has retired after over 43 years in investment research, now operating independently to provide actionable investment insights [1] - The focus is on rules and factor-based equity investing strategies, emphasizing the use of numbers to inspire human intelligence-driven investment stories rather than solely relying on statistical studies [1] - The individual combines factor analysis with classic fundamental analysis to uncover the true story of companies and their stocks, highlighting the importance of future-oriented investing [1] Experience and Background - The individual has extensive experience covering a wide range of stocks, including large cap, small cap, micro cap, value, growth, and income [1] - Previous roles include managing a high-yield fixed-income fund and conducting research on quantitative asset allocation strategies, contributing to the development of Robo Advising [1] - The individual has authored two books on stock selection and analysis and has a passion for investor education, having conducted numerous seminars [1]

Group 1 - The article discusses the utility of price-to-earnings (P/E) ratio as a valuation filter for stocks, indicating that a 20x forward P/E suggests an investor is purchasing a company with approximately a 5% earnings yield, which is generally considered reasonable for solid companies in the stock market [1] - The author identifies as a value investor, focusing on fundamental analysis to find undervalued stocks with growth potential, covering both Brazilian and global stocks [1] Group 2 - The article does not provide any specific investment recommendations or advice, emphasizing that past performance does not guarantee future results [2] - It clarifies that the views expressed may not reflect those of Seeking Alpha as a whole, and the analysts involved may not be licensed or certified by any regulatory body [2]

Core Insights - Netflix is experiencing a reacceleration in revenue growth, achieving nearly 20% growth and 6 percentage points of margin expansion in 2024, driven by strategic initiatives like paid sharing and advertising [1][2] - The company aims to double its advertising revenue in 2025 after already doubling it in 2024, tapping into an estimated $180 billion addressable market [4][6] Growth Strategy - Netflix is employing a multi-pronged growth strategy that includes member growth, pricing optimization, and advertising to enhance long-term revenue and profit [3][4] - Approximately 55% of new sign-ups in Q4 2024 opted for the ad-supported tier, indicating strong demand for this revenue stream [2] Market Opportunity - Despite having over 300 million paying members, Netflix believes there is significant room for growth, capturing only about 6% of its addressable revenue market and less than 10% TV view share in major countries [5][6] - The company is focused on expanding household penetration, revenue per customer, and increasing viewership share [7] Competitive Advantages - Netflix's global content production capabilities, with programming produced in over 50 countries, differentiate it from competitors and support its growth strategy [8][9] - The company is also enhancing its advertising business, live event offerings, gaming capabilities, and leveraging artificial intelligence to drive innovation [10]

Core Insights - Netflix Inc. has experienced significant subscriber growth in the last two years due to its crackdown on password sharing [1] - The growth is primarily attributed to users who previously relied on others' login credentials now subscribing for their own accounts [1] Subscriber Growth - The surge in subscribers is linked to the enforcement of policies against password sharing [1] - Research firm MoffettNathanson indicates that this growth may soon plateau as the initial wave of new subscribers is largely exhausted [1]

Group 1: Subscription Economy Overview - Subscription-based services provide companies with a steady and recurring revenue stream, reducing volatility compared to hardware sales [1] - These services generate predictable income, enhancing financial stability and fostering long-term customer engagement [1] Group 2: Apple Inc. Services Segment - Apple Inc. exemplifies the subscription trend with its Services segment, which includes the App Store, Apple Music, iCloud, Apple TV+, and Apple Arcade & Fitness+ [2] - The Services segment has grown from $78.1 billion in 2022 to $96.2 billion in 2024, reflecting a 13% year-over-year increase [2] - This segment boasts high gross margins of 73.9%, significantly higher than the 37.2% margins of its hardware business, making it a key driver of overall profitability [2] Group 3: Netflix and Sony in Subscription Market - Netflix remains the dominant player in subscription-based streaming with over 250 million subscribers and reported $10.25 billion in revenues for Q4 2024, marking a 16% year-over-year growth [4] - Sony's PlayStation Plus saw a 20% revenue increase in Q3 of fiscal year 2024, driven by price adjustments and a shift toward higher-tier subscriptions [6] Group 4: Integration with Apple - Netflix benefits from Apple's App Store ecosystem, allowing easy access for iOS users, although it has moved away from Apple's in-app payment system [5] - Sony collaborates with Apple through compatible PlayStation controllers and content licensing from Sony Pictures for Apple TV+, enhancing both companies' ecosystems [7] Group 5: Cross-Company Dynamics - Netflix and Sony are interconnected with Apple's growth in services through various integrations, with Apple's ecosystem facilitating subscriber acquisition and retention for both companies [8] - The collaboration among Apple, Netflix, and Sony encourages consumers to embrace paid digital entertainment, driving industry growth [8] Group 6: Future Growth Potential - Subscription-based services are identified as a high-margin and high-growth business model, with companies like Netflix and Sony positioned to benefit from the ongoing shift toward digital entertainment and cloud-based services [10]

Core Viewpoint - Netflix is expanding its live sports content, particularly with NFL games, which has positively impacted its subscriber growth and viewership metrics during the fourth quarter [1][5][10]. Group 1: Subscriber Growth and Viewership - Netflix added a record 18.91 million paid subscribers in the fourth quarter, ending with 301.63 million total subscribers [5]. - The two NFL games streamed on Christmas Day averaged 24.3 million and 24.1 million viewers, setting new streaming records for the regular season [6][7]. - The Christmas Day games generated significant advertising demand and likely broke even on revenue, excluding the additional subscribers gained [7]. Group 2: Content Strategy and Future Plans - Netflix's chief content officer expressed interest in acquiring more NFL games, specifically targeting Sunday afternoon games, although this was noted as an informal comment [2][4]. - The company is on a three-year deal with the NFL, ensuring at least one game every Christmas Day [6]. - Netflix is also exploring rights for other sports, including the Women's World Cup and potentially Formula 1, indicating a strategic shift towards acquiring more live sports content [10]. Group 3: Market Response and Poll Results - A Benzinga poll indicated mixed responses regarding the addition of NFL games, with only 10% of respondents stating they would subscribe specifically for NFL content [9][11]. - The majority of respondents (56%) preferred other options, suggesting that while NFL content may enhance Netflix's offerings, it may not significantly drive new subscriptions [9][11]. Group 4: Financial Performance - Netflix's stock is currently trading at $972.58, reflecting a 10% increase year-to-date in 2025 and over 57% growth in the past year [12].