We recently published a list of 10 AI Stocks Analysts Are Focusing On These Days. In this article, we are going to take a look at where Netflix, Inc. (NASDAQ:NFLX) stands against other AI stocks analysts are focusing on these days.
Dennis Unkovic, a partner at Meyer, Unkovic & Scott, said in a latest program on CNBC that DeepSeek is the result of President Xi Jinping’s policy of prioritizing AI and tech research over the past few years. The analyst believes DeepSeek is the response of China to American tariffs.
“Today, if you take technology, maybe two-thirds of it is Western and one-third of it is Chinese. It’s clear to me that what the Chinese want to do is move the needle so they’re at least 50/50. What this means…. in the future, is you’re going to have a country that’s going to have to say, what kind of technology do I want to adopt? Is it technology from the West, or is it technology from China? So I think this is a strong opening salvo of the Chinese to the U.S., saying, if you want to put tariffs on me, this is the way we’re going to go.”
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For this article, we picked 10 AI stocks that are trending amid the DeepSeek-triggered selloff that rocked the markets. With each stock, we have mentioned the number of hedge fund investors. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
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Netflix, Inc. (NASDAQ:NFLX)
Number of Hedge Fund Investors: 121
Mark Douglas, MNTN CEO, recently explained on CNBC why he believes Netflix, Inc. (NASDAQ:NFLX) shares can keep soaring.
“I think of Netflix, what I think of is they have three big advantages. So, one is they’re the first place most consumers go to when they want to watch TV, period. And that’s why they’re able to take, like, a Jake Paul fight and Mike Tyson fight and turn it into Super Bowl-level numbers, because everyone is going there to decide what they want to watch, and if that’s what’s on, that’s what they’re going to watch.
And then they also have, like, this—they’re so profitable now, and they can create more content, and more content drives new subscribers. This is the last thing I think is what’s most important: those new subscribers, more than half of them, are signing up for ad-supported service, and that is barely monetized. So, the same way they had, like, this password backlog of revenue, they’re building this advertising backlog of revenue. And I think their stock is just going to keep soaring.”
Polen Focus Growth Strategy stated the following regarding Netflix, Inc. (NASDAQ:NFLX) in its Q2 2024 investor letter:
“Finally, we trimmed Netflix, Inc. (NASDAQ:NFLX) mostly due to valuation but also as a source of funds to add to the new position in Shopify. As a reminder, we added to our position in August 2022 amid broad concerns about the company’s ability to grow and monetize shared passwords. We expected Netflix to show progress in monetizing shared passwords, leading to robust free cash flow generation. This is now playing out and is appreciated by the market. Hence, given the balance of growth and valuation, we felt it was appropriate to reduce our exposure to a more normal weight.”
Overall, NFLX ranks 7th on our list of AI stocks analysts are focusing on these days. While we acknowledge the potential of NFLX, our conviction lies in the belief that under the radar AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than NFLX but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
