Netflix (NFLX 0.92%) stock gained 11% in June, according to data provided by S&P Global Market Intelligence. It received several analyst upgrades, it made some celebrated announcements, and it also seems to be rising on the coattails of Apple‘s success with its hit film F1: The Movie.

The Trillion-dollar stock

Netflix has been having another moment. Despite tons of new competition and a changing streaming landscape, it has remained in the top streaming spot, which is a real feat. It speaks to the company’s excellent management and foresight, and it bodes well for the company’s future potential as it successfully adapts, changes, and leads.

In the 2025 first quarter, revenue increased 13% year over year, and operating income was up 27%. Operating margin improved from 28.1% to 33.3%, and earnings per share (EPS) increased from $5.28 to $7.03. The company has stopped reporting subscriber count, but it had more than 300 million paid subscribers at the end of 2024.

Image source: Getty Images.

Ad revenue from its relatively new ad-supported tier is still a small portion of total revenue, but management is expecting it to double this year. It’s also guiding for “healthy” subscriber growth and some price increases, and it maintained its full-year guidance despite continued pressure in the environment, boosting market confidence.

The strong results and improving streaming have led to several recent analyst upgrades, and the stock is rising as a result. It’s also benefiting from an overall improving market, with the S&P 500 index up 5% last month.

Toward the end of June, Netflix stock surged on the day Apple’s new hit film, F1:The Movie, hit theaters. That suggests that streaming tech giants can produce theater-level quality films that can be hits at the box office. Netflix has had some limited theater runs, but it doesn’t seem to have plans to make this a major part of its model.

To top off the month, it got another round of applause after NASA announced that it would stream rocket launches on Netflix starting this summer.

Can Netflix stock go higher?

Management recently boasted that it believes it can reach a $1 trillion valuation by 2030. That implies nearly doubling — which may or may not happen — but Netflix has demonstrated resilience and innovation over many years, and it’s likely to keep changing with the times and offer value for shareholders.

Cybercriminals are reportedly engineering fraudulent search results to trick unsuspecting victims seeking tech support assistance.

Jérôme Segura, the senior director of research at the antivirus firm Malwarebytes, says the criminals use sponsored search results on Google to trick people looking for 24/7 support for Apple, Bank of America, Facebook, HP, Microsoft, Netflix and PayPal.

The fake advertisements take people to copycat websites that imitate the sites of those big brands mentioned above. Instead of posting a real tech support phone number, the sites direct people to call scam numbers, Segura explains.

“The browser address bar will show that of the legitimate site, and so there’s no reason for suspicion. However, the information the visitor sees will be misleading, because the search results have been poisoned to display the scammer’s number prominently in what looks like an official search result.

Once the number is called, the scammers will pose as the brand with the aim of getting their victim to hand over personal data or card details, or even allow remote access to their computer. In the case of Bank of America or PayPal, the scammers want access to their victim’s financial account so they can empty it of money.”

Segura warns that people seeking tech support online should be aware of various scam warning signs, like a phone number in the URL and encoded characters like the %20 (space) and %2B (+ sign), along with phone numbers.

The malware researcher also says people should look out for websites that display urgent language like “Call Now,” “Account suspended,” and “Emergency support,” as well as similarly urgent language in the address bar of the browser.

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Looking back over the past decade and beyond, I don’t think there are many folks out there who would deny just how impressive Tesla‘s success has been. This innovative business, led by polarizing CEO Elon Musk, disrupted the global auto industry with its electric vehicles (EVs).

While the EV stock trades 32% below its peak (as of June 10), that’s still a gain of 1,810% in the past 10 years. That long-term performance made it one of the world’s largest tech companies, which is why Bank of America analyst Michael Hartnett gave it a spot in the “Magnificent Seven” when he introduced the idea of the group in 2023. However, I think it’s time to swap the EV maker out of this unofficial grouping and replace it with the more-deserving Netflix (NFLX -0.24%).

Image source: Getty Images.

Tesla’s struggles are hard to ignore

Over the years, Tesla shareholders grew used to seeing the company register jaw-dropping sales growth. The picture isn’t so rosy anymore, though. Its automotive revenue declined 20% year over year in Q1. In 2024, it reported its first-ever year-over-year drop in deliveries. And the company’s profitability has continued to slide as higher interest rates and a more competitive environment have put downward pressure on demand for its vehicles.

Musk’s push in the political arena might at first have been viewed positively by some investors, as he was positioning himself to have more influence in Washington, D.C., which could have benefited Tesla from a regulatory perspective. But both his time in President Donald Trump’s inner circle and his more recent exit from politics, as well as his highly public spat with Trump, have been huge distractions that have certainly damaged Tesla’s brand instead.

It’s safe to say that a company that was once in the fast lane is now stuck in traffic. Tesla will have a lot of work to do in order to get back to its prior glory.

Netflix just keeps winning

While Tesla faces a battle to get itself back on track, Netflix continues to flourish. The streaming stock is up 1,200% in the last decade. The company added 41 million net new customers in 2024, bringing its total to nearly 302 million at year’s end. While Netflix chose to stop publicly reporting the number of subscribers it has starting this year, it did increase revenue by 12.5% year over year in the first quarter.

It might seem like this streaming platform has saturated its market. However, co-CEO Greg Peters believes there are still “hundreds of millions of folks to sign up.” By continuing to focus on creating compelling content offerings all over the world, Netflix is in a position to keep its expansion going. Wall Street’s consensus analyst estimates are for its revenue to rise at a compound annual rate of 12.3% between 2024 and 2027.

The streaming industry, like the automotive market, is extremely competitive. Netflix co-founder and former CEO Reed Hastings previously said that he counts sleep among the company’s key competitors. I don’t believe this was a stretch. Netflix goes up against all the other activities consumers can do when it’s time to wind down and relax.

But to be more specific, people have an almost unlimited number of viewing options at their fingertips today. Netflix is in the lead, though. Data from Nielsen shows that Netflix commanded 7.5% of video viewing time in the U.S. in April, only behind YouTube, which isn’t necessarily an apples-to-apples comparison due to the latter largely featuring user-generated content.

With its massive subscriber base, and trailing 12-month revenue of $40 billion, Netflix has the financial strength to spend a lot on content and marketing. And it’s still able to bring in billions in free cash flow each year.

It’s important to highlight that the “Magnificent Seven” is not an official index like the S&P 500 is. However, with each passing quarter, Netflix continues to make the case that it deserves to be mentioned with the tech giants in that group. Given the streaming pioneer’s ongoing success, it belongs in that exclusive club instead of Tesla.

The world is Netflix‘s (NFLX -0.14%) oyster. That is what it has felt like over the past few years as the company has sucked all the oxygen out of the video streaming market.

Its global presence and huge catalog of content give it a competitive advantage over streaming rivals, which is why viewers flock to the service. Revenue continues to march higher, while profits are soaring.

Management does not think the growth party is over just yet. According to reporting from The Wall Street Journal, Netflix is aiming to reach a market cap of $1 trillion by 2030, which would be around double its current level at $500 billion. Here’s the math behind the analysis and whether the company can hit these targets by the end of the decade.

Global expansion and pricing power

Video streaming processed through the cloud has turned the media sector into a truly worldwide game. Netflix has taken advantage of this global pie, investing to produce video specifically in markets such as Europe, Latin America, South Korea, and India.

This global expansion is why it eclipsed 300 million total subscribers at the end of 2024, making it the largest pure-play premium video streamer in the world. With a global population of 8 billion and rising use of the internet every year, there is plenty of room to expand its total subscribers in the years to come.

Another factor for Netflix’s success is pricing power. In the U.S., its premium subscription tier has gone from $11.99 a month in 2013 to $24.99 currently. This more than doubling in monthly subscription fees has helped revenue grow by close to 600% in the last 10 years.

More importantly, it has helped the company gain some operating leverage over its cost base, with operating income inflecting higher to $11.3 billion in the last few years. Free cash flow is now positive at $7.5 billion over the last 12 months, giving the company the flexibility to keep pushing for more growth globally.

Image source: Getty Images.

Sports and advertisements

By 2030, Netflix wants its advertising tier to generate around $9 billion in global ad sales, up from an estimated $2 billion currently. This advertising tier was launched in 2023 and is a huge driver of new sign-ups for Netflix.

As it rolls out globally, it will hopefully see even more customers sign up. Advertising has historically been a huge revenue driver for the media industry that Netflix decided to lay off of for a long while. Now, it is turning on this new revenue stream and hopes to see huge growth in the years to come.

An easy way to connect with advertisers is by adding sports content. Sports leagues are one of the biggest draws for large advertisers because they bring in millions of live viewers for games, something that is not happening with traditional TV shows or movies anymore.

Netflix is starting to invest in sports such as licensing World Wrestling Entertainment, which has weekly live events. Investors should track Netflix’s investments into sports streaming rights in the years to come. They may have a large impact on the advertising revenue for the business.

NFLX Operating Margin (TTM) data by YCharts; TTM = trailing 12 months.

The math to a $1 trillion market cap

According to the reporting, Netflix aims to double its revenue to $80 billion in 2030 and triple its operating income to around $30 billion. Advertising revenue of $9 billion will be a large part of that equation.

How will the company do it? It hopes to grow its total subscribers to 410 million compared to 300 million at the end of 2024. However, that would only lead to about 30% growth in revenue assuming no changes to subscription pricing.

What this means is that Netflix will need to continue increasing the price of its subscription service while simultaneously growing advertising sales if it hopes to double revenue in the next five years. This is a tall task, but one it is poised to achieve.

Operating income tripling to $30 billion feels doable as well. Expanding operating margins is not something a company can do indefinitely, but Netflix has consistently pushed up its operating margin in the last 10 years, hitting 28% in the last 12 months. I think the company can keep expanding its profit margins as it scales up to greater heights in the years to come.

That $30 billion in operating income likely equates to $25 billion in net income when factoring in corporate tax rates. Should Netflix be valued at a trillion-dollar market cap if it generates $25 billion in net income? Maybe. That is a price-to-earnings ratio (P/E) of 40, which is well above the average for stocks, even durable growers like Netflix.

It is possible, but not a guarantee, that the market cap will double to $1 trillion in the next five years. We have no idea what the stock’s future P/E will be.

It still remains a good hold for investors who have bought the stock in the past. However, I don’t think Netflix is a strong buy today.

Netflix (NFLX 1.44%) is one of the best-performing stocks of the 21st century, and it’s been one of the biggest surprises over the last three years.

The streaming giant was left for dead in 2022 after it reported two straight quarters of declining subscriber growth in the aftermath of the pandemic. Since then, the company has cracked down on password sharing, launched an advertising tier, and begun embracing live sports, a genre it traditionally avoided.

As a result, the company has returned to strong growth on the top and bottom lines, and the stock has soared over the last three years, reaching a market cap of more than $400 billion. Now, management thinks it has a path to getting to a trillion-dollar valuation by 2030, according to a report from The Wall Street Journal. Doing so would mean the stock would jump 139% over the next five years, assuming that its share count holds flat.

Can Netflix get there? Let’s take a look at its prospects.

Image source: Getty Images.

The path to $1 trillion

Netflix has put a lot of daylight between itself and the rest of the industry, especially as legacy media companies like Disney have struggled in streaming thus far.

The company added more than 40 million subscribers last year to bring its total to more than 300 million. Management has set a target of 410 million by the end of 2030, meaning it would grow at a compound annual growth rate of about 5% over six years, or add 18 million subscribers a year. That goal seems very achievable for Netflix, which has historically grown its subscriber base by about 25 million to 30 million a year.

The service has become more mature in key markets like North America, where it has 90 million subscribers, or close to 75% of all broadband households. So some slowdown is expected.

The company has attracted new advertisers by lowering its ad rates. It said that 43% of subscribers joined through the ad tier in February. That’s key, because the ceiling on ad revenue is higher than for subscriptions. Netflix earns more revenue as ad-based users watch more programming. That helps explain why the company is no longer reporting subscriber numbers every quarter, though presumably it will give updates when it reaches them.

Looking ahead to 2030, Netflix is targeting $9 billion in ad revenue, up from an estimated $2 billion this year, as part of its plan to double annual revenue to $80 billion. It also aims to grow operating income from $10.4 billion last year to $30 billion.

If Netflix does that, a $1 trillion market cap should be an achievable goal.

Is Netflix a buy?

Tripling operating income in six years won’t be automatic, but Netflix has a number of tailwinds that can help it get there. First, its advertising business has reached scale, and the company is expected to switch away from Microsoft as its ad tech partner and use its own proprietary system. Reaching scale means that future growth will be more profitable, as the incremental costs to serve those ads will fall. The same is true for the content-focused side of the business. Netflix can grow subscriptions without having to spend as much on adding content, especially as it branches into new categories like live sports, which it plans to accelerate.

The streaming stock currently trades at a price-to-earnings ratio of 49, meaning that significant growth is already priced in. This could present a challenge to the company’s goal of achieving a $1 trillion market cap in five years.

However, Netflix doesn’t have to get there to be a good buy or to outperform the S&P 500. In fact, the company seems well-positioned for the current trade war upheaval, as it offers a service that can’t be tariffed. Its product also arguably represents a way to save money versus going out to a movie or live entertainment, meaning it’s a product people would keep or even use more of in a recession, though it is a discretionary item. As of April 14, Netflix stock is higher than it was on April 2 (when President Donald Trump announced global tariffs). That’s a sign of that resilience.

Though the stock is pricey, Netflix’s business is thriving, and it’s well-positioned to endure the chaos and even a recession from the trade war. It’s still an excellent stock to buy.