Prediction: This Will Be the First Entertainment Stock to Reach a $1 Trillion Valuation (Hint: It's Not Disney)
The No. 1 name in streaming has its sights set on joining the coveted trillion-dollar club.
One stock that has managed to buck the recent sell-off in the Nasdaq is streaming and entertainment giant Netflix (NASDAQ: NFLX). One of the catalysts fueling Netflix shares at the moment is an ambitious plan by management to reach a trillion-dollar valuation by 2030.
According to a recent piece in The Wall Street Journal, Netflix's leadership has outlined a detailed plan to boost subscriber growth and scale its advertising business over the next five years. Let's explore how Netflix can achieve management's targets, and then look at the math behind the company's forecasts to help determine whether a trillion-dollar valuation seems reasonable.
It wasn't too long ago that Netflix primarily served as a digital catalogue of licensed television series and movies. And while the platform still features fan favorites from other studios, Netflix has spent the last decade investing in original content to differentiate itself from legacy media businesses. The strategy has paid off with incredibly popular titles such as Stranger Things, Wednesday, and Squid Game attracting subscribers to its service.