1 Reason I'm Never Selling Netflix Stock

I bought my first DVD player in 2004. In the box, I found a coupon for a trial subscription to Netflix (NASDAQ: NFLX). The DVD-by-mail idea felt weird at first, and I canceled my membership after a couple of rentals, preferring to browse the shelves at Blockbuster around the corner instead.

But I wasn't gone for long.

Image source: The Motley Fool.

My 20-year Netflix journey started with a free trial

The next year, my budding family moved to a new house in a different city, and Blockbuster was no longer within walking distance. Netflix's larger catalog and lower prices felt like an upgrade, even if it meant planning ahead a bit more. And when I wrote a long-form deep dive on the rapidly changing video rental industry in 2006, the Netflix model stood out as the obvious future.

I bought some shares of Netflix stock, doubled down on the position during the Qwikster dip in 2011, and continued to build it. The $100 I put into the first purchase is worth $23,900 on April 22, 2026. I have trimmed my Netflix holdings from time to time, in the interest of diversification and locking in some profits, but I have no plans to close this position. Netflix still accounts for 18% of my portfolio.

You see, Netflix's management refuses to play the hype game.

The company has long-term plans and will never manage the business to meet immediate market demands. I don't always know what Netflix will do next, and management will adjust its ambitions as the movie industry changes. But it's always a deep strategy, and that's exactly what I want.

A 12% drop for beating estimates? Classic Netflix.

For a recent example of this approach, take a look at the earnings report for the first quarter of 2026.

Netflix beat earnings estimates. Revenue came in higher than expected. Earnings per share (EPS) blew past projections. The stock promptly fell 12%.

Wall Street wanted fireworks and a victory lap, with sharply higher full-year guidance. Instead, Netflix offered a sensible sweater and a cup of chicken soup, holding 2026 targets firm after crushing bottom-line targets in the first quarter.

The widespread thirst for boosted guidance makes sense, right? After all, Netflix pocketed a $2.8 billion termination fee from Paramount Skydance when the Warner Bros. Discovery deal fell apart. That windfall fell straight to Netflix's bottom line, so an unchanged full-year target must mean lower profits than expected in the next three reports.

The champagne can wait

But Netflix co-CEOs Greg Peters and Ted Sarandos must have plans for the extra cash. It's probably something boring, like higher-budget content productions or a deeper investment in advertising technology. Netflix's strategy rarely revolves around making more profit this year, when the company can invest in growth drivers for the long haul instead.

So it's oatmeal instead of champagne, even with a rare multibillion-dollar payout to spend. And honestly? That's the whole reason I'm never selling this stock.

This dip isn't the first time Netflix has frustrated short-term traders in favor of committed shareholders. The company has a long history of ignoring quarterly theatrics in favor of reinvesting in content, technology, and international expansion. That approach has compounded shareholder value over decades; it just doesn't always look good on any given Thursday afternoon.

Anders Bylund has positions in Netflix. The Motley Fool has positions in and recommends Netflix and Warner Bros. Discovery. The Motley Fool has a disclosure policy.