Billionaire Bill Ackman Thinks Netflix (NFLX) Will Rebound Despite Slowdown Trends. Is He Right?

Bill Ackman of Pershing Square conscionable told his investors helium bought Netflix (NASDAQ:NFLX). The banal is down astir 35% implicit the past twelvemonth and 15% truthful acold this year.

Ackman said successful his missive to investors that Netflix has already won the streaming wars. The institution has much than 325 cardinal subscribers, astir treble what its 2 biggest rivals person enactment together. He thinks the banal got inexpensive aft falling from much than 40x guardant net down to astir 21x, mostly connected the collapsed Warner Bros. Discovery bid and worries astir slowing growth.

So is helium right?

The Bull Case

At astir 20x guardant earnings, the bulls deliberation the marketplace is fixated connected the incorrect number. Revenue maturation is cooling toward the 12% Netflix guided for the 3rd 4th of 2026. But the communicative present is monetization, not sign-ups. Netflix already has its 325 cardinal members. Bulls reason Netflix has much monetization powerfulness to marque wealth from its subscription base.

Advertising does astir of the dense lifting erstwhile it comes to monetization. Netflix spent years moving ads connected Microsoft's technology, which meant nary existent power implicit targeting oregon pricing. That changed erstwhile it launched its ain Ads Suite successful the US past year. Ad gross much than doubled past year. The cheaper advertisement tier volition assistance seizure budget-conscious households.

Pricing is besides a tailwind, according to bulls. Netflix, Disney+, Hulu, and HBO Max present each beryllium successful a akin range. Pay astir the aforesaid terms and Netflix hands you a batch much to watch, truthful the worth lawsuit inactive lands.

That's what Ackman highlighted successful his letter. He said Netflix tin "outspend" its rivals and put much successful large content.

Netflix tin turn net successful the low-to-mid teens adjacent with gross slowing. Consensus has EPS astatine $3.82 for fiscal 2027 and $4.58 for fiscal 2028. Games, unrecorded events, and Netflix House — real-world venues wherever fans tin eat, shop, and locomotion done sets from deed shows — are semipermanent catalysts for the stock.

The Bear Case

Bears accidental streaming has matured, and the casual maturation is gone. Netflix gross roseate 13.4% successful the 2nd quarter, down from 17.2% a twelvemonth before, and the third-quarter usher of 11.7% would beryllium its weakest 4th successful 3 years.

Competition is the different worry. YouTube took the astir US viewing clip successful 2025 astatine 12.6%; Netflix came 2nd astatine 8.3%. Engagement is softening too. Daily viewing per subordinate dropped 7%, to astir an hr and 33 minutes. Keep that going and Netflix has little headroom to rise prices oregon heap connected ads.

While we admit the hazard and imaginable of NFLX arsenic an investment, our condemnation lies successful the content that immoderate AI  stocks clasp greater committedness for delivering higher returns and doing truthful wrong a shorter clip frame. If you are looking for an AI banal that is much promising than INFQ and that has 10,000% upside potential, cheque retired our study astir the cheapest AI stock.

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