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Rick Munarriz, The Motley Fool
Mon, April 20, 2026 astatine 5:57 AM CDT 5 min read
Growth capitalist Cathie Wood was amazingly quiescent past week, arsenic the marketplace raced to caller highs. She lightened her involvement connected a brace of positions crossed her Ark Invest ETFs connected Monday. She didn't marque immoderate trades connected Tuesday oregon Wednesday. She pared backmost connected a azygous holding connected Thursday. It wasn't until Friday that Wood really bought something, and Netflix (NASDAQ: NFLX) was 1 of conscionable 2 existing positions that she added to connected the last trading time of past week.
With Netflix shares plummeting astir 10% connected an different buoyant trading day, Friday's terms enactment stands out. Many assertive maturation investors similar to bargain stocks connected the mode up, but Wood doesn't usually behave similar a momentum investor. Ark Invest often adds to positions connected down days, adjacent though the different banal she bought connected Friday was a biotech soaring astir 30% by the closing bell.
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Is Wood's contrarian stance connected Netflix the close call? Let's instrumentality a look astatine immoderate of the reasons wherefore she could beryllium wrong. I'll travel up with immoderate reasons wherefore investing successful Netflix mightiness beryllium a astute happening to do.
On the surface, Thursday afternoon's fourth-quarter results were a blowout. The 16% summation successful gross done the archetypal 3 months of this twelvemonth was conscionable up of the 15% that Netflix was targeting. Earnings soared 83% to $5.3 cardinal -- oregon $1.23 a stock -- landing good up of what analysts and Netflix itself were modeling.
The numbers whitethorn look decent, but this wasn't a bully report. It wasn't adjacent a ho-hum report. Revenue roseate conscionable 14% connected a foreign-exchange neutral basis. Was it truly a top-line bushed oregon conscionable the fortunate interruption of being connected the close broadside of a weakening U.S. dollar implicit the past year?
The bottom-line bushed is adjacent much worthy of an asterisk. When Netflix initiated its first-quarter guidance successful January, it didn't expect to beryllium connected the receiving extremity of a $2.8 cardinal outgo from Warner Bros. Discovery (NASDAQ: WBD) arsenic a buyout termination fee. The windfall aft taxes inflated the quarterly performance.
Two different dings successful the study were much obvious. Guidance was disappointing. Netflix didn't boost its full-year outlook, contempt exceeding its first-quarter forecast and raising monthly subscription prices for U.S. users past month. The second-quarter guidance it initiated was different buzzkill, arsenic the 13.5% year-over-year summation successful gross would beryllium its weakest top-line summation implicit the past year. Its bottom-line outlook was abbreviated of Wall Street's nett target. With home prices rising successful precocious March, the sting is peculiarly harsh.
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