Why July 16 Could Be a Turning Point for the Netflix Stock Price
Key Points
The Netflix stock price rose when the company announced it was no longer pursuing assets from Warner Bros. Discovery.
Content costs for the first half of the year concerned investors.
Netflix still needs to be on track to reach $3 billion in ad revenue for the year and keep costs under control for the stock price to rally.
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Ever since Netflix (NASDAQ: NFLX) walked away from trying to acquire assets from Warner Bros. Discovery, the stock price hasn't found its footing.
Investors initially cheered Netflix's decision to withdraw from the bidding war with Paramount Skydance. But shares didn't gain much traction afterward, and Netflix's warnings about its content costs in the first half of the year haven't helped. As of this writing, the Netflix stock price is down roughly 19% year to date.
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On July 16, however, the next meaningful direction for the stock price could take shape.
Image source: Getty Images.
Netflix's next report
On Thursday, July 16, Netflix will release its financial results for the second quarter of 2026.
Ad revenue totals will be an important metric to watch to see if Netflix is still on track to reach $3 billion by the end of the year. As subscription growth matures, ads are not just another sales vehicle for the company. Growing ad revenue can also help offset content costs.
Those content costs are also worth monitoring and hearing the company's take on. The management team did warn that content costs would be higher in the first part of the year, so if that headwind is mostly behind Netflix, that will offer some relief.
What happens after July 16
If Netflix shows that ad revenue is on track to reach $3 billion or exceed that forecast, along with content costs stabilizing in the back half of the year, that's a recipe that could help send the stock price higher.
If ad revenue isn't living up to forecasts, if content costs are projected to climb in the upcoming quarters, or both, the next direction for the stock price is likely lower.
Either way, this report can highlight for long-term investors whether a rebound is forming or if there's still some turbulence to navigate through.
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Jack Delaney has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Netflix and Warner Bros. Discovery. The Motley Fool has a disclosure policy.
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