Netflix Hits Record High as Subscriber Growth Eases Investor Concerns

Netflix’s shares soared to a record high on Friday, driven by strong subscriber additions and a robust content lineup that continues to attract viewers. The stock surged nearly 10%, poised to add more than $28 billion to its market value, currently standing at about $295 billion.

The company added 5.1 million new subscribers in the third quarter, surpassing analyst expectations, although this number was lower than last year’s 8.76 million additions. Netflix expects even higher subscriber growth in the last quarter, fueled by the much-anticipated return of the hit South Korean drama “Squid Game.”

Financial Performance Exceeds Expectations

Netflix’s profit and revenue outperformed estimates, signaling a positive shift in investor sentiment. Recent price hikes in regions like Japan, Europe, and Africa have contributed to the revenue boost, with analysts expecting a similar price increase in the U.S. next year.

Ad-Supported Tier Shows Promise

The company’s ad-supported subscription plan also showed progress, accounting for over 50% of new sign-ups in markets where it’s available. However, Netflix does not expect advertising to become a major revenue driver until 2026.

At least 20 analysts raised their price targets following Netflix’s strong results, bringing the median target to $760, up from $706. Netflix’s stock has gained around 41.2% this year, outpacing competitors like Disney, which has risen by 6.9%, and Warner Bros Discovery, which has seen a 31% decline.

Content Lineup to Fuel Future Growth

Netflix is betting on a strong slate of upcoming content, including a new “Knives Out” movie, the next season of “Stranger Things,” and live NFL events, which are expected to drive more subscriber sign-ups. Analysts believe the company’s ability to invest in content, while competitors face financial challenges, gives Netflix a strategic advantage.

Despite concerns of a slowdown, Netflix’s steady subscriber growth, coupled with its evolving pricing strategy and successful ad-supported tier, has reassured investors of its long-term growth potential.