The Stock Market Is Historically Pricey: Here's Why You Can Trust Netflix to Deliver

Group 1 - The S&P 500 is currently trading at a price-to-earnings ratio of 28, significantly above its historical average, indicating a potential risk of a market bubble forming [1] - Many stocks, particularly those benefiting from artificial intelligence trends, are vulnerable to a market pullback, but Netflix is positioned to perform well regardless of market conditions [2][4] - Netflix has shown strong growth and resilience, having overcome previous subscriber declines and now benefiting from a diversified revenue stream primarily from international markets [5][6] Group 2 - The introduction of an ad-supported subscription tier in late 2022 is expected to double advertising revenue this year, providing a lower-cost option for price-sensitive consumers [6] - Despite a high price-to-earnings ratio of 55, Netflix has multiple growth avenues, including price increases, expanding international subscriber reach, and selling more ad inventory [7] - The company's global diversification limits its sensitivity to any single region, making it less vulnerable to economic fluctuations [5]