Top 10 Stocks to Buy According to SRS Investment Management

1. Netflix, Inc. (NASDAQ:NFLX)

Number of Hedge Fund Holders as of Q4: 144

SRS Investment Management’s Equity Stake: $1.8 Billion 

Netflix, Inc. (NASDAQ:NFLX) reported a record-breaking fourth-quarter performance in 2024, with revenue surging 16% to $10.25 billion and earnings per share doubling to $4.27. The company added 18.91 million new subscribers, bringing its total user base to 301.63 million. With projections of a 13% revenue increase in 2025, Netflix is leveraging its strong content library and strategic pricing adjustments to sustain growth. Over the past decade, its revenue has expanded by 609%, and its market capitalization now exceeds $400 billion, making it a compelling long-term investment option.

Investor confidence remains high, as reflected in Netflix, Inc. (NASDAQ:NFLX)’s stock price, which jumped 18% following its impressive Q4 results. J.P. Morgan reaffirmed a bullish stance with a $1,150 price target, while Bernstein set an even higher $1,200 target. The company’s focus on cost discipline, including a crackdown on password sharing and selective content investments, helped improve operating margins from 21% in 2023 to 27% in 2024. Free cash flow reached $6.9 billion in 2024 and is expected to grow to $8 billion in 2025. Netflix’s decision to prioritize regional content and one-off events over costly sports broadcasting rights has further optimized returns on investment.

Despite a temporary market downturn in March 2025 that pushed shares down to $860, Netflix, Inc. (NASDAQ:NFLX)’s long-term outlook remains strong. The company continues to repurchase stock as a means of returning value to shareholders, even without paying dividends. Analysts highlight the company’s massive global subscriber base, disciplined financial management, and strategic content approach as key factors positioning it for sustained success in the competitive streaming industry.

Insider Monkey’s database indicated that, out of the 1,009 hedge funds it tracks, 144 hedge funds held stakes in Netflix, Inc. (NASDAQ:NFLX) at the end of Q4 2024 with a combined value of nearly $19.61 billion, as opposed to 121 funds in Q3.

Overall, Netflix, Inc. (NASDAQ:NFLX) ranks first on our list of top 10 stocks to buy according to SRS Investment Management. While we acknowledge the potential for 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.

READ NEXT: 20 Best AI Stocks to Buy Now and 30 Best Stocks to Buy Now According to Billionaires

Disclosure: None. Insider Monkey focuses on uncovering the best investment ideas of hedge funds and insiders. Please subscribe to our free daily e-newsletter to get the latest investment ideas from hedge funds’ investor letters by entering your email address below.