Netflix (NASDAQ: NFLX), the undisputed leader in global streaming, is facing mounting investor skepticism even as its business fundamentals remain broadly strong.
The platform commands more than 325 million subscribers worldwide, buoyed by popular titles including “Stranger Things” and “KPop Demon Hunters,” cementing its cultural dominance.
Yet the company’s stock closed Tuesday at $73.68 per share, representing a 21% decline this year and a 42% drop from the same period a year ago.
Much of the investor anxiety stems from Netflix’s decision in February to walk away from acquiring Warner Bros. Discovery, a deal that had been positioned as a potentially transformative expansion of the company’s media empire.
Since abandoning that pursuit, investors have pressed the company on how it intends to sustain its competitive advantage at the top of an increasingly crowded streaming landscape.
Compounding the concern, Netflix’s share of U.S. TV viewing time has been slipping, with Nielsen data showing the platform represented just 7.8% of all American TV viewing in April, the lowest figure recorded since May 2025.
Meanwhile, rival YouTube has been gaining ground, with its U.S. TV viewing share rising to 13.4% in April, up from 12.4% a year earlier, according to Nielsen.
“Obviously, they have a very successful business,” said Ross Benes, a senior analyst at research firm eMarketer. “Your investors always want to just see more and more and more, and they mostly provide that one thing.”
Analysts warn that declining viewership could trigger subscriber cancellations, which would put pressure on Netflix’s fast-growing advertising business and limit its ability to raise prices in key markets like the United States.
Despite the investor unease, equity analysts polled by FactSet estimate Netflix will report second-quarter revenue of $12.58 billion, a 14% increase, alongside net income of nearly $3.38 billion, up 8% from a year earlier.
Netflix is scheduled to release its second-quarter earnings results on Thursday, and the company declined to comment for this story.
The Los Gatos-based company has pushed back on the pessimism, noting its low churn rate relative to competitors and pointing out that it currently reaches only about 5% of global TV viewing, leaving substantial room for growth.
“We believe we have meaningful advantages as we strive to become a must-have service for consumers: a strong global brand, a wide range of high-quality programming, a best-in-class product experience, and a frequent role at the center of culture,” Netflix said in its April letter to shareholders.
The company is also broadening its entertainment offering into live programming, games, video podcasts, and advertising as part of a strategy to diversify beyond its core subscription model.
Netflix last year generated more than $1.5 billion in advertising revenue and expects to roughly double that figure to $3 billion this year, signaling that its ad-supported tier is gaining meaningful traction.
“We believe this is a long-term growth company,” said Jessica Reif Ehrlich, senior media and entertainment analyst at BofA Securities, who carries a buy rating on the stock.
Netflix is also adding video podcasts such as “The Breakfast Club” and partnering with YouTube creators and media companies like BuzzFeed Studio to bring short-form content as brief as three minutes to its platform.
“They help existing subscribers use the service more,” Benes said. “Let’s say I get in the habit of watching all these video podcasts on Netflix. It might not be the reason why I pay for it, but I might say, ‘Oh, I don’t know if I want to cancel it.'”
Some analysts believe Netflix should pursue further acquisitions following the Warner Bros. Discovery miss, with Comcast’s planned spinoff of NBCUniversal, home to properties including “Minions” and “Jurassic Park,” drawing speculative interest.
“From our point of view, it makes a ton of sense,” Reif Ehrlich said of a potential NBCUniversal deal. “Universal also has a great film and TV library. Maybe not as deep as Warner Bros., but very strong.”
Netflix executives are also reportedly weighing the launch of genre-based live channels and potential bundling arrangements with other streaming services, with The Wall Street Journal first reporting on those internal discussions.
“Years ago, they said they wouldn’t get into advertising. They wouldn’t get into sports. They wouldn’t have theatrical releases,” Reif Ehrlich said. “So the business will continue to evolve and change.”
