Netflix, Inc. (NFLX)'s Warner Bros. Acquisition Faces Regulatory Scrutiny Amid Mixed Analyst Outlook

Netflix Inc. (NASDAQ:NFLX) is one of the best blue-chip stocks with a 52-week low to buy right now. On January 27, Reuters reported that the U.S. Senate Judiciary Committee planned a hearing on Netflix’s (NASDAQ:NFLX) proposed acquisition of Warner Bros., a deal that could reshape the streaming industry. Scheduled for February 3, the hearing was set to examine how the merger might affect competition, with Netflix gaining access to franchises like Friends and Batman and the HBO Max platform. The deal has also drawn attention in the UK over concerns it could strengthen Netflix’s dominance.

Netflix originally offered $83 billion in cash and stock, but later revised the deal to an all-cash offer to address investor concerns over its volatile share price. This move put additional pressure on rival bidder Paramount Skydance, whose offer Warner Bros. Discovery rejected as riskier.

During the February 3 hearing, senators questioned Netflix Co-CEO Ted Sarandos about the $82.7 billion acquisition. Led by Senator Mike Lee, lawmakers warned the merger could reduce consumer choice, cut entertainment jobs, and limit competitors’ access to Warner Bros.’ content, further boosting Netflix’s market power. The Justice Department is reviewing the deal alongside Paramount Skydance’s bid amid intensifying scrutiny over its impact on the streaming market.

On January 21, Needham cut Netflix’s price target to $120 from $150 but kept a Buy rating, citing $275 million in expected legal and regulatory costs in 2026 that could weigh on margins and free cash flow, while highlighting strong content plans and growing subscriber retention. The same day, Deutsche Bank raised its price target to $98 from $95 with a Hold rating, noting solid Q4 results but flagging operating income pressure from the Warner Bros. deal.

Netflix, Inc. (NASDAQ:NFLX) is a global streaming service that produces and licenses content and offers subscription plans, including ad-supported options.

While we acknowledge the potential of 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.

READ NEXT: 15 Best Cheap Stocks to Buy for 2026 and 10 Stocks with Huge Growth Potential According to the Media.

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