Analyst Explains Why Netflix (NFLX) is a Defensive Play to Buy for Potential Recession

We recently published a list of Top 10 Stocks to Watch as Investors Brace for Recession. In this article, we are going to take a look at where Netflix, Inc. (NASDAQ:NFLX) stands against other top stocks to watch as investors brace for recession.

Despite some optimism in the market after President Donald Trump’s indication of possible talks with China, Wall Street analysts are warning about recession risks due to the impending impact of tariffs and an overall decline in consumer sentiment.

Adam Parker, Trivariate Research CEO, said in a recent interview with CNBC that it’s “hard” to be bullish in this market because the impact of tariffs is yet to be reflected in companies’ earnings.

Parker thinks that in the coming days, earnings reports of many companies will begin to show that we are indeed facing an economic slowdown:

“You know there’s a difference between a growth scare and and then an actual growth slowdown I think in this case it is a growth slowdown I don’t know how much of it is yet and that’s where I think the challenge is but you can’t just say oh it’s an irrational growth scare that everyone has and it’s like an uncertain I think if you have a business with pricing power if you have a business that you know you can be okay. But there’s a lot of economically sensitive businesses we’re going to hear from next week and the week after if you think about how earning season typically unfolds where we may get guidance that isn’t quite as peachy as we’ve seen from you know the original guys in the banks and then some of the higher quality tech companies have reported.”

READ ALSO: 7 Best Stocks to Buy For Long-Term and 8 Cheap Jim Cramer Stocks to Invest In.

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Netflix, Inc. (NASDAQ:NFLX)

Number of Hedge Fund Investors: 121

Malcolm Ethridge, Capital Area Planning Group managing partner, said in a latest program on CNBC that Netflix, Inc. (NASDAQ:NFLX) has become a defensive play to buy as the company is poised to do well despite a recession risk.

“Netflix is one of those that ironically has become a bit of a defensive play right now in an environment where consumer spending has definitely changed, right? Where consumers aren’t necessarily spending on bigger ticket items and maybe not traveling so much. What they are willing to still continue to pay for is that home entertainment, and probably adding more subscribers in this quarter, in the next couple, as we are concerned about a recession. Netflix is probably going to be one of the bigger winners in that space. And so I think that the report right here just showed the strength of that name, even though you would assume the consumer would be pulling back on subscription services in the entertainment space.”

Harding Loevner Global Developed Markets Equity Strategy stated the following regarding Netflix, Inc. (NASDAQ:NFLX) in its Q4 2024 investor letter:

“During the quarter, we benefited from strong stocks within the Communication Services and Consumer Discretionary sectors. Netflix, Inc. (NASDAQ:NFLX) was our top relative contributor; the company provided a favorable outlook for subscriber growth in 2025 and made progress in two key areas, live TV and advertising. The streaming service broadcast its first sporting events, including two National Football League games on Christmas, and said that the ad-supported plan it launched two years ago amassed 70 million subscribers, more than investors expected.”

Overall, NFLX ranks 4th on our list of top stocks to watch as investors brace for recession. While we acknowledge the potential of NFLX as an investment, our conviction lies in the belief that under the radar AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than NFLX but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock.

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