Netflix Soars Toward $1 Trillion Valuation Amid Market Volatility

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•  15 May 2025
 

While global markets remain volatile in 2025, Netflix continues to shine as a rare success story. Shares of the company, trading at $1,177, have jumped 25% since April 2nd—outpacing the S&P 500’s modest 4.1% gain during the same period. Investors are taking notice as Netflix’s stock climbed another 2.3% today, signaling growing confidence in its resilience and growth strategy.

What sets Netflix apart is its unique positioning. Unlike companies exposed to international tariffs, Netflix generates value by creating content, not trading physical goods. When former President Donald Trump proposed a 100% tariff on imported films, the stock dipped only slightly—down 2%—reflecting the market belief that Netflix can easily shift production stateside or adjust pricing to adapt.

Netflix has a proven track record of thriving during uncertain times. During the COVID-19 pandemic, the stock surged as global lockdowns drove demand for streaming content. And unlike traditional safe-haven assets like gold—which may falter if tariffs ease—Netflix appears to be on a long-term growth path that continues to win investor confidence.

Despite its momentum, some critics point to Netflix’s valuation as a concern. The stock trades at a price-to-earnings ratio of about 43, significantly higher than the S&P 500’s average of 21 and even above the “Magnificent Seven” tech giants average of 27. Yet historically, Netflix has traded at an average multiple of 52 over the past five years. From a once cash-burning content upstart to a stable, profitable company, Netflix transformation has been nothing short of remarkable.

Ben James, a strategist at Baillie Gifford—the Edinburgh-based investment firm that holds over 4 million Netflix shares valued at $4.5 billion—believes the company is still undervalued given its growth potential. According to James, Netflix operating margin, now at 27%, could nearly double by 2030, driven by a self-reinforcing cycle: more subscribers fuel more investment in content, which in turn attracts more subscribers.

Netflix executives have reportedly set an ambitious goal: reaching a $1 trillion market cap by the end of the decade, up from $484 billion today. And analysts think it's within reach, assuming earnings growth keeps pace. Recent moves like launching lower-priced ad-supported plans have opened new revenue streams. Advertising only accounted for 4% of revenue in 2024, but Netflix expects that figure to double this year. Amy Reinhard, the company President of Advertising, announced that ad-tier subscriptions have brought in 24 million users in the past six months. With artificial intelligence poised to personalize ads even further, profitability could soon soar.

The streaming giant is also venturing into live sports broadcasting, another lever for growth and expansion into untapped markets. Even though Netflix is already a household name, there’s still room to grow. As of Q4 2024, the company reported 301.6 million global subscribers. CFO Spencer Neumann has previously estimated a total addressable market of 700 million to 1 billion households.

Netflix is even moving beyond streaming. In February, it opened its first restaurant—Netflix Bites—in Las Vegas, offering dishes inspired by hit shows and films. Two immersive “Netflix Houses” are also planned for launch this year, further diversifying the brand’s footprint.

This evolving business model is generating impressive results. Analysts expect Netflix EBITDA to grow 26% this year, 20% in 2026, and another 18% in 2027. All signs point to a company not just weathering economic storms but mastering them. With a powerful content engine, innovative growth strategies, and expanding global reach, Netflix is steadily climbing toward that $1 trillion valuation—transforming itself into one of the most compelling success stories in the modern market.