Cathie Wood is known for chasing conviction, and that was clearly on display with her aggressive buying of Netflix (NFLX) stock.
On January 21, the ARK Invest boss shelled out $7.27 million on the streaming giant’s stock after Netflix posted another superb quarter of beats across both lines.
Despite the rock-solid performance, Netflix stock dropped as Mr. Market remained far less focused on the headline numbers and more on the Warner Bros. bidding war overhang. That disconnect is exactly what drew Wood in, as she bought the dip, believing the market is misreading a longer-term growth story.
For some color, Netflix stock has been under duress, having shed 31% of its value in the past six months. However, despite the rough outing of late, it’s important to note that it has been a multibagger over the years, having generated a 150% gain over the past three years.
2025 was a banner year for ARK’s core lineup, with Wood’s “disruptive innovation” strategy ripping through with outsized gains.
- ARK Autonomous Technology & Robotics ETF: +48.81%
- ARK Space & Defense Innovation ETF: +48.46%
- ARK Next Generation Internet ETF: +38.93%
- ARK Innovation ETF (flagship): +35.49%
Looking ahead, she sees another strong year in 2026, rejecting AI bubble talk and hailing the technology as “the most powerful capital spending cycle in history” on the horizon.
From that perspective, Netflix is a streaming giant positioned to benefit immensely from shifting media economics, backed by robust, long-term tech-driven growth, despite the recent sluggishness.
Cathie Wood buys Netflix stock as earnings beat collides with Warner Bros. deal uncertainty.
Photo by Bloomberg on Getty Images
Stocks ARK bought on January 21
- Netflix: 83,368 shares — $7.27 million
- Tempus AI: 89,501 shares — $5.98 million
- WeRide: 111,439 shares — $945,000
- Trimble: 8,817 shares — $614,000
Stocks ARK sold on January 21
- Beam Therapeutics: 135,193 shares — $4.19 million
- GitLab: 87,999 shares — $2.91 million
- Pinterest: 118,823 shares — $3.02 million
- Kratos Defense & Security Solutions: 8,646 shares — $1.11 million
Netflix redefined the business of streaming
It’s safe to say that Netflix’s rise has been nothing short of extraordinary.
Never in my wildest dreams would I have imagined watching films and TV shows with the convenience of a remote control or a voice command, back when I was renting DVDs and almost always late in returning them.
In essence, what Netflix ended up doing was retraining consumer behavior. It has effectively turned streaming into a primary TV destination (not just an add-on).
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That shows up in the numbers, too.
Netflix accounted for a mighty impressive 9% of total U.S. TV viewing in December 2025, according to Nielsen’s The Gauge statistics snapshot.
Top platforms called out in the report:
- Netflix:9% of TV
- Prime Video:4.3% of TV
- The Roku Channel:3% of TV
- Paramount Streaming (Paramount+ + Pluto):2.5% of TV
- Streaming overall (category total):47.5% of TV viewing
Strong results reinforce Netflix’s long-term growth case
Strip away all the noise, and Netflix’s latest quarterly report paints a picture of a business that continues to impress.
Sales growth remains impressively accelerated, while bottom-line numbers continue to shine. This is why investors may view the current slump as a buy-the-dip situation.
Netflix earnings snapshot (Q4 2025)
- Revenue:$12.051 billion, up 17.6% year over year (the company said revenue was about 1% above its own guidance).
- Earnings:Diluted EPS of $0.56 vs. $0.43 a year ago (+31% year over year); net income of $2.419 billion.
- Profitability:Operating income of $2.957 billion (+30% year over year), operating margin of 24.5% (up about 2 points year over year).
- Beats: Results edged past Wall Street’s expectations (revenue of about $12.05 billion versus roughly $11.96 billion; EPS of $0.56 versus about $0.55).
- Guidance:FY 2026 revenue of $50.7 billion to $51.7 billion (+12% to 14% year over year) and a 31.5% operating margin. Q1 2026 forecasted sales at $12.157 billion and EPS of $0.76. Source: Netflix Form 10-K / shareholder materials (Q4 2025)
Netflix’s quarter stood out because it showed off quality growth, where a 30% growth in operating income underscores robust pricing power and improving unit economics.
Margins grew despite the company’s rampant investing, which shows Netflix continues scaling profitably instead of just squeezing costs.
Advertising has also become a major second-growth lever.
Related: Bank of America warns investors unprepared for stock-market correction
Ad revenues for the streaming giant jumped more than 50% in 2025 to more than $1.5 billion, and are expected to double again in 2026, The Verge reported. That allows Netflix to avoid hiking subscription prices, on the back of stronger average revenue per user.
However, the forward optics felt slightly rough, thus the muted stock reaction.
Netflix’s 2026 outlook included nearly a 10% bump in content amortization along with $275 million in acquisition-related expenses, according to Variety. Throw in the decision to pause buybacks due to the Warner Bros. deal, and things get even testier.
Warner Bros. deal would be a game-changer for Netflix
The Warner Bros. deal has been talked about a lot, and if it gets the green light, it will probably be the biggest deal in entertainment history.
Netflix CEO Ted Sarandos struck a remarkably upbeat tone on the potential acquisition during the company’s Q4 earnings call.
For Netflix, the proposition is obvious, as it ends up locking perhaps the deepest premium libraries in the entertainment industry, widening its already impressive moat in the process. Warner Bros., HBO, and DC are franchises with a ton of staying power, and owning them outright is huge, to say the least.
The Reddit crowd is also cheering the Warner Bros. acquisition.
User Asianwaste, in the r/television subreddit, which draws over 3 million members, shared their thoughts.
“The Warner Bros brand has such a strong legacy that we might even see a rebrand of Netflix. Something like Warner Netflix or Warner will be the umbrella company and Netflix is the service within,” Asianwaste added.
The advertising angle becomes a lot bigger, too.
A combined Netflix-HBO footprint creates a power-packed combo that becomes almost impossible for advertisers to avoid, strengthening pricing power.
Nevertheless, the risks are real.
Regulatory scrutiny, integration issues, and the optics of media consolidation are all pertinent issues to consider.
Where the Netflix-Warner Bros. saga stands now
- Status: Netflix just recast its bid as an all-cash offer valued at nearly $82.7 billion ($27.75/share), according to Reuters, and reports suggest that Warner Bros. Discovery’s board is backing Netflix’s proposal.
- Rival bid still in play: Paramount Skydance is currently pressing a much higher headline $30/share all-cash offer, but concerns over certainty and structure have surfaced compared with Netflix’s financing profile.
- Regulatory path: EU regulators will be scrutinizing the Netflix and Paramount tracks in parallel, while U.S./U.K. reviews will be heavy as well.
- Next milestone: A shareholder vote is slated for April (per the current timetable).