What Does 2026 Hold For Netflix Stock?

Netflix stock delivered strong financials through 2025, with relatively high revenue growth and margins despite signs of subscriber maturation. Yet shares faced volatility, ending the year roughly flat to slightly up. As 2026 unfolds – with advertising scaling, live sports expanding, a massive Warner deal pending, and experiential ventures emerging—what’s next for the streaming titan?

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Advertising Business

As subscriber growth reaches a ceiling in mature markets, advertising provides a secondary “lever” to increase revenue without needing millions of new sign-ups. It turns Netflix into a dual-threat business model similar to cable TV, but with better data. Netflix enters 2026 with 190 million monthly active ad-tier users. Analysts view ads as a margin-expansion play. Unlike content creation, which is capital-intensive, ad revenue is nearly pure profit once the technology stack is fully built. This could support a higher price-to-earnings (P/E) multiple for Netflix eventually.

Live Sports & Content Spending

Netflix is using live events such as WWE, NFL, MLB to create “appointment viewing.” This reduces “churn” – the tendency for users to cancel and resubscribe – by giving them a reason to log in every week. While the company’s content spending plans for 2026 are not set as yet, it is expected to remain high, near its $18 billion annual budget for 2025. Sustained Free Cash Flow (FCF) is the key metric here. If Netflix can keep content spending flat while revenue grows from sports ads, the stock could see significant upside; however, overspending on sports rights is the primary risk factor for investors.

The Warner Deal in Focus

Netflix and Warner Bros. Discovery (WBD) announced a major acquisition deal in December 2025, valued at as much as $82.7 billion. Acquiring Warner gives Netflix some of the world’s most prestigious content, such as HBO, Harry Potter, and the DC Universe.  However, Paramount launched hostile all-cash bids ($30 per share) backed by Larry Ellison and others, although Warner deems them inferior and advises rejection. The stock has recently been under pressure (down 17% since early December) because the markets don’t like the uncertainty and the $59 billion in new debt Netflix might have to assume to pay for the deal. Long-term, however, the “synergies” ($2 to 3 billion in annual savings) are expected to make the deal accretive to earnings by 2028.

Netflix Experiences