Cathie Wood Just Bought the Dip in Netflix Stock. Should You?

Core Insights - Ark Invest purchased Netflix shares for the first time after a 10% drop post-earnings, acquiring 15,756 shares valued at $17.5 million, making it the 40th-largest holding in the fund with a 0.77% allocation [1] - Netflix missed earnings estimates due to a one-time charge from a Brazilian tax dispute, but Ark's investment reflects confidence in Netflix's long-term potential despite short-term volatility [1] - The relatively small position suggests a strategic dip-buying opportunity rather than a high-conviction bet, with Ark's ETF having surged over 100% in the past year [2] Financial Performance - In Q3, Netflix achieved a record television viewing share in the U.S. and U.K., indicating growth in engagement amid increasing competition in the streaming sector [3] - Netflix reported its best advertising sales quarter ever and is on track to more than double ad revenue for the year, although specific figures for the advertising business were not disclosed [4] - Subscription fees are expected to continue driving the majority of revenue growth, supported by recent price increases across multiple tiers, including the ad-supported option [4] Content Strategy - The upcoming content slate for Q4 includes major franchises like the final season of Stranger Things and new seasons of The Diplomat and Nobody Wants This, which are expected to enhance subscriber engagement [5] - Netflix's animated film KPop Demon Hunters became its most-watched movie ever, with over 325 million views, showcasing its content-creation capabilities [5] Partnerships and Revenue Diversification - Netflix announced partnerships with Hasbro and Mattel to produce consumer products related to KPop Demon Hunters, set to hit retail shelves in spring 2026, indicating exploration of adjacent revenue opportunities [6] - The company is also investigating licensing possibilities in various sectors, including live experiences, publishing, beauty, lifestyle, food, and beverages [6]