Here's How Netflix (NFLX) Rewarded Patient Investors

Rowan Street Capital, an investment management company, has recently released its third-quarter 2025 investor letter. A copy of the letter can be downloaded here. The fund remained unchanged in the third quarter (+0.22%), making the YTD returns through September 30, 2025, to +20.4% net of fees compared to the S&P 500’s +14.8% year-to-date gain. Over the past three years, the firm’s capital compounded at approximately +54.2% annually (net), delivering a +266% cumulative return — more than doubling the S&P 500’s +24.9% annualized gain over the same period. The fund’s performance was driven by its commitment to process refined through years of experience, mistakes, and reflection. For more information on the fund’s best picks in 2025, please check its top five holdings.

In its third-quarter 2025 investor letter, Rowan Street Capital highlighted stocks such as Netflix, Inc. (NASDAQ:NFLX). Incorporated in 1997, Netflix, Inc. (NASDAQ:NFLX) is an entertainment services provider. The one-month return of Netflix, Inc. (NASDAQ:NFLX) was -7.60%, and its shares gained 47.95% of their value over the last 52 weeks. On October 22, 2025, Netflix, Inc. (NASDAQ:NFLX) stock closed at $1,116.37 per share, with a market capitalization of $474.375 billion.

Rowan Street Capital stated the following regarding Netflix, Inc. (NASDAQ:NFLX) in its third quarter 2025 investor letter:

"Netflix, Inc. (NASDAQ:NFLX) has been in our portfolio for over five years and has compounded at 23% annually. The past three years have been especially telling. When the stock collapsed in 2022 amid fears of saturation and rising competition, we stayed patient, confident in the company’s pricing power, global scale, and unrivaled content engine. Since then, Netflix has proven its resilience, reigniting growth through paid sharing advertising, and improved content efficiency. It’s a powerful reminder that truly exceptional businesses often emerge from temporary doubt stronger than before."

Netflix, Inc. (NASDAQ:NFLX) is in 14th position on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 133 hedge fund portfolios held Netflix, Inc. (NASDAQ:NFLX) at the end of the second quarter, compared to 150 in the previous quarter. While we acknowledge the potential of Netflix, Inc. (NASDAQ:NFLX) as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

In another article, we covered Netflix, Inc. (NASDAQ:NFLX) and shared the list of trending stocks moving these days. Macquarie Core Equity Fund shared its insights on Netflix, Inc. (NASDAQ:NFLX) in the recent investor letter. In addition, please check out our hedge fund investor letters Q3 2025 page for more investor letters from hedge funds and other leading investors.

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Disclosure: None. This article is originally published at Insider Monkey.