12 Best QQQ Stocks to Invest in Now

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8. Netflix Inc. (NASDAQ:NFLX)

Number of Hedge Fund Holders: 144

Netflix Inc. (NASDAQ:NFLX) offers a library of TV series, films, documentaries, and games across diverse genres and languages. Through its streaming platform, which is accessible on various internet-connected devices, it delivers entertainment to members in about 190 countries.

The company has seen remarkable adoption of its ad-supported plan, with over 55% of new sign-ups in ad-supported countries opting for this tier. The company’s ad-supported plan offers a lower-priced subscription option to consumers in exchange for viewing advertisements during their streaming experience. Viewer engagement on the ad-supported plan is on par with the standard and non-ad-supported plan, which indicates that viewers are finding value in the ad-supported experience.

In Q4 2024, ad revenue doubled year-over-year, and Netflix Inc. (NASDAQ:NFLX) projects it will double again in 2025. The company is scaling up and enhancing its ad tech to capitalize on the growing demand. A crucial step in this process is the rollout of the company’s own ad stack, which starts with the US in April. This move is designed to improve the buyer experience and offer flexibility to advertisers. It ultimately aims to capture a larger share of the over $25 billion connected TV ad spend market.

The company’s strong earnings, subscriber growth from new initiatives, and optimistic financial projections made it a top contributor to the RiverPark Large Growth Fund’s performance. The fund stated the following regarding Netflix Inc. (NASDAQ:NFLX) in its Q4 2024 investor letter:

“Netflix, Inc. (NASDAQ:NFLX): NFLX was a top contributor in the fourth quarter powered by a 3Q earnings report that included stronger-than-expected revenue and operating income, solid subscriber additions, and positive forward commentary. Anti-password sharing and ad tier initiatives continue to drive subscriber growth while improving revenue per user trends, from recent price increases, drive margin expansion. The company was optimistic about future revenue growth, margin expansion, free cash flow generation and future return of capital programs.

The recent re-acceleration of subscriber growth, plus price increases on premium memberships and a stabilization of content investments, should position the company for low double digit annual revenue growth over the next few years while driving operating margin to more than 25%. We also believe that the stabilization of content spend should allow the company to continue to scale its free cash flow.”

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