1. Netflix, Inc. (NASDAQ:NFLX)
Number of Hedge Fund Holders: 121
Cramer noted that despite skepticism surrounding Netflix, Inc.’s (NASDAQ:NFLX) ad-supported tier, a series of successful shows and events kept loyal viewers engaged.
“Next up, Netflix. What the heck were we thinking when we didn’t own Netflix? Is there a week that goes by where we don’t talk about a Netflix show? The big linear TV networks like to do expensive shows about fires and hospitals and police… It’s been their formula since the 1970s. They just keep doing the same thing, failing each year. But Netflix, they come up with things like Jake Paul versus Mike Tyson and it did huge viewership numbers… Millions of people watched it… We watch all sorts of… programs from other countries because we’ve been taught by Netflix to like subtitles. It’s insane how good this company is. Honestly, convincing Americans to read subtitles, that may be the most important cultural event of the 21st century.
And yet Wall Street doubted Netflix the whole way when it came to the new ad-supported subscription tier. They didn’t get it perfect right out of the box and… many of these who followed the company presumed it was a bust. Oh, it was hardly a bust and it’s just gonna get bigger and bigger. It’s easy to say, of course, that… anyone could have had it. But those who spend their lives examining this company thought otherwise. They said, stay away and they’re the professionals. Who are we to doubt the professionals? They doubted the ad tier. Who are we to doubt them? And then there’s the multiple, the darn price-to-earnings multiple. Netflix was always selling for 50 times earnings, which is just too high for the people who care about valuation. But those people aren’t the general public. They aren’t the home gamers and the home gamers who love Netflix, they won. Cult stock that’s up 89% for the year.”
Netflix (NASDAQ:NFLX) is a leading global provider of streaming entertainment, delivering a wide range of movies, TV shows, and original content to millions of subscribers across the world. The company’s expansion into various regions has made it one of the most prominent entertainment platforms in the world, with 282.7 million memberships across its different subscription plans.
In 2024, Netflix made a significant mark in the sports streaming arena. The boxing match between former heavyweight champion Mike Tyson and YouTuber-turned-boxer Jake Paul, which aired on Netflix, became the most-streamed global sporting event ever, according to a Netflix release. The event attracted 65 million live concurrent streams, with a total of 108 million live viewers worldwide.
Furthermore, Netflix (NASDAQ:NFLX) has seen positive growth with its ad-supported subscription tier. Launched two years ago, the cheaper plan has already reached 70 million global monthly active users. In November, the company revealed that more than 50% of new sign-ups in countries where the ad-supported option is available are opting for this plan.
While we acknowledge the potential of Netflix, Inc. (NASDAQ:NFLX) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. 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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