Why Netflix (NFLX) Stock Is Up Today

What Happened?

Shares of streaming video giant Netflix (NASDAQ: NFLX) jumped 2.6% in the afternoon session after Seaport Research Partners upgraded the stock to 'Buy' from 'Neutral', pointing to significant growth potential in the company's advertising business. 

The firm also increased its price target for the stock to $1,385. The upgrade was based on the belief that Netflix was positioned for a major boom in its advertising operations and could better monetize its platform. Analysts at Seaport argued that after years of building the required infrastructure, Netflix could double its ad revenue to $3.1 billion this year. They also projected that this revenue stream could expand to as much as $16 billion by 2030. This optimistic view followed a period where the company's stock had pulled back from its recent highs.

The shares closed the day at $1,192, up 2.4% from previous close.

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What Is The Market Telling Us

Netflix’s shares are not very volatile and have only had 7 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.

The biggest move we wrote about over the last year was 9 months ago when the stock gained 15.4% on the news that the company reported impressive fourth-quarter results, which blew past analysts' global streaming paid memberships expectations, with a strong net add figure (18.9 million vs. estimates of 9.8 million). 

This led to a revenue and EPS beat in the quarter. Additionally, revenue guidance for 2025 beat expectations, and the company spoke optimistically about multiple vectors such as ad revenue, live events, and new content. Netflix's decision to increase pricing on certain subscription plans also reflected management's confidence in its content's quality and suggested potential benefits for both sales and profitability. 

Overall, this quarter was strong. Following the strong performance, Barclays upgraded the stock's rating from Sell to Hold, adding, "The company's continued outperformance largely disproves our hypothesis on growth mean reversion and while growth will slow in '25, current operating momentum if sustained, could drive further upside."

Netflix is up 34.4% since the beginning of the year, but at $1,192 per share, it is still trading 11% below its 52-week high of $1,339 from June 2025. Investors who bought $1,000 worth of Netflix’s shares 5 years ago would now be looking at an investment worth $2,229.

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