Why Netflix's Big Subscriber Win Makes NVIDIA a Smart Investment Bet

Group 1: Netflix Performance - Netflix reported a remarkable fourth-quarter performance in 2024, gaining 19 million new subscribers, the highest ever in a single quarter, bringing total net additions for 2024 to 41 million and global memberships to 302 million [2] - Revenues increased by 16% year over year to $10.25 billion, exceeding the Zacks Consensus Estimate of $10.12 billion, driven by strong content performance, advertising growth, and increased membership [3] - The company’s operating income rose by 52%, indicating significant improvement in profitability [3] Group 2: Content and Engagement - Popular titles such as Squid Game Season 2 and major live events, including the most-streamed NFL games and boxing matches, contributed to subscriber growth and engagement [4] - Netflix anticipates continued momentum in 2025, forecasting revenue between $43.5 billion and $44.5 billion while expanding its advertising and live programming businesses [4] Group 3: NVIDIA's Opportunity - NVIDIA stands to benefit from Netflix's subscriber growth as Netflix relies on advanced technology for high-quality streaming, utilizing NVIDIA's powerful graphics processing units (GPUs) [5] - As Netflix's subscriber base grows, the demand for improved technology infrastructure increases, which aligns with NVIDIA's capabilities to provide the necessary computing power [6] Group 4: Market Outlook for NVIDIA - Wall Street's average price target for NVIDIA suggests a potential increase of 48.3% from its recent closing price of $120.07, with the highest target reaching $220.00, indicating a potential gain of 83.2% for shareholders [8] - The growth of streaming platforms like Netflix drives demand for high-performance graphics and AI, areas where NVIDIA excels, making it a favorable investment alongside Netflix [7]