Netflix stock just hit an all-time high on Tuesday, with shares of the streaming giant soaring past their 2021 record intraday high of $701 to trade around $710. The surge in stock price comes as investors applaud the company’s recent foray into live sports and the continued success of its ad-supported tier.
One of the key factors driving the recent rally in Netflix stock is the company’s success in securing ad partnerships. In a blog post, Netflix revealed that it had seen a „150% plus increase in upfront ad sales commitments over 2023.“ This growth can be attributed to upcoming movies and series like „Happy Gilmore 2“ and „Squid Game 2,“ as well as the recent acquisition of live sports content such as the NFL Christmas Day games and WWE Raw, set to kick off in January 2024.
Netflix’s president of advertising, Amy Reinhard, highlighted the excitement among ad partners like LVMH, Amazon, Hilton, L’Oreal, and Google. The company plans to launch its in-house ad tech platform globally in 2025, further solidifying its position in the advertising space.
In addition to its success in advertising, analysts have pointed to Netflix’s potential for price hikes as a driver of the recent stock rally. The company last raised the price of its Standard plan in January 2022 and has since increased the cost of its Premium tier multiple times. Despite these price increases, Netflix’s ad-supported offering remains one of the cheapest among major streaming players at $6.99 a month.
Looking ahead, Netflix aims to make ads a significant revenue stream that contributes to sustained growth in 2025 and beyond. As part of this strategy, the company plans to phase out its lowest-priced ad-free streaming plan, making the $15.49 Standard plan its lowest-priced offering for ad-free experiences.
While Netflix’s record-high stock price on Tuesday is certainly a cause for celebration, it comes on the heels of a mid-July sell-off prompted by revenue guidance that missed Wall Street’s expectations. The recent recovery in Big Tech stocks has also contributed to the rebound in Netflix’s share price.
Overall, Netflix’s recent success in securing ad partnerships, potential for price hikes, and strategic focus on ad revenue growth position the company well for continued success in the streaming market. Investors will be watching closely to see how Netflix continues to innovate and drive growth in the coming months.