Is Netflix Stock a Buy in 2026?

Core Insights - Netflix's stock has underperformed, rising only 3.7% over the last 12 months compared to the Nasdaq Composite's 18% increase [1] - The company's limited exposure to the generative AI trend and concerns over its acquisition of Warner Bros. Discovery are contributing factors to investor unease [2] Business Performance - Netflix's third-quarter revenue increased by 17% year over year, reaching $11.5 billion, driven by strong performance in core markets like the U.S. and U.K. [3] - The platform has achieved significant viewership with original programming and major sports events, including the Canelo Álvarez vs. Terence Crawford fight, which attracted 41 million viewers [3] - The company has disrupted traditional pay-per-view models in sports, creating new revenue opportunities and strengthening its competitive position [4] Growth Opportunities - Netflix has potential to expand its audience for original content, particularly in emerging markets such as India, Asia Pacific, and Latin America [5] - The company can increase revenue per user in mature markets by enhancing advertising sales, with J.P. Morgan estimating this could grow to $4.2 billion by 2026 [5] - The acquisition of Warner Bros. Discovery could enhance Netflix's content library, leveraging established intellectual properties like Potter and The Lord of the Rings for original content creation [8]