We recently compiled a list of the 10 Best Entertainment Stocks to Buy According to Billionaires. In this article, we are going to take a look at where Netflix, Inc. (NASDAQ:NFLX) stands against the other entertainment stocks.
The entertainment industry is a global and fast-growing sector that encompasses film, music, social media, games, and live events. According to a report by The Business Research Company, the entertainment and media market was valued at $2.67 trillion in 2024. The market is expected to grow at a compound annual growth rate (CAGR) of 7.4% during 2025-2029 to reach a value of more than $3.82 trillion by the end of the forecast period. In 2024, the largest region in the entertainment and media market was North America.
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The industry is rapidly evolving thanks to technological advancements, changing consumer preferences, and global connectivity. The internet and mobile devices continue to make entertainment more accessible around the world. These factors ensure continued growth within the industry.
Entertainment companies are innovating their business models to stay competitive, especially as streaming services become more popular. Advertising is also becoming a key strategy for entertainment and media companies.
New technologies like AI, VR, and AR continue to revolutionize content creation and consumption. Moreover, the gaming sector is expected to grow in the coming years and this should support further growth in the entertainment industry. These trends offer significant growth potential, especially for entertainment companies involved in gaming and streaming.
Methodology
To compile our list of the 10 best entertainment stocks to buy according to billionaires, we looked for the biggest entertainment companies. We also reviewed our own rankings, financial media reports, ETFs, and stock screeners to compile a list of the best entertainment stocks. Next, we focused on the top 10 entertainment stocks most favored by billionaires. Data for the number of billionaire investors for each stock was taken from Insider Monkey’s Q4 2024 database. Finally, the 10 best entertainment stocks to buy were ranked in ascending order based on the number of billionaires holding stakes in them as of Q4 2024.
Additionally, we mentioned the hedge fund sentiment surrounding each stock, which was taken from Insider Monkey’s Q4 2024 database of more than 1,000 elite hedge funds.
Why do we care about what hedge funds do? 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 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
A home theater with family members enjoying streaming content together.
Netflix, Inc. (NASDAQ:NFLX)
Number of Billionaire Investors: 25
Number of Hedge Fund Holders: 144
Netflix, Inc. (NASDAQ:NFLX) is an American media and entertainment company with more than 300 million paid memberships in over 190 countries around the world. The company is best known for its streaming services. It offers a wide variety of TV shows, movies, documentaries, original content, and games across a wide variety of genres and languages. Netflix, Inc. (NASDAQ:NFLX) ranks among the best entertainment stocks to buy.
On March 17, MoffettNathanson upgraded the rating on Netflix, Inc. (NASDAQ:NFLX) from ‘Neutral’ to ‘Buy’ and raised its price target by $250 to $1,100. The firm cited the company’s ability to better monetize user engagement and unlock new revenue streams. MoffettNathanson highlighted that Netflix, Inc. (NASDAQ:NFLX) has won the streaming wars and there is room for further growth in the future. The company has a large subscriber base, which allows it to spend more on content to drive engagement and attract even more subscribers. MoffettNathanson analysts pointed to the company’s ad-supported tier as a key driver of future growth. This tier is a lower-cost option that expands Netflix, Inc.’s (NASDAQ:NFLX) total addressable market while generating dual revenue streams through subscription and advertising. MoffettNathanson expects Netflix, Inc. (NASDAQ:NFLX) to generate more than $6 billion in ad revenue by 2027 and nearly $10 billion by 2030. Additionally, MoffettNathanson expects the company’s operating margins to expand by at least 200 basis points annually, potentially reaching 40% by 2030. This combination of subscription growth, advertising revenue, and margin expansion supports the firm’s confidence in Netflix, Inc.’s (NASDAQ:NFLX) long-term profitability.
Overall, NFLX ranks 1st on our list of the best entertainment stocks to buy according to billionaires. While we acknowledge the potential of NFLX as an investment, our conviction lies in the belief that some 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.