Bill Ackman Is Buying Netflix. Should Investors Load Up, Too?
Key Points
Ackman's hedge fund incurred a steep loss when it sold Netflix back in 2022.
The streaming giant's margins are improving as the company expands its offerings.
- 10 stocks we like better than Netflix ›
Bill Ackman and his hedge fund, Pershing Square Capital Management, recently disclosed that it increased its stake in Netflix (NASDAQ: NFLX). The last time Ackman's funds owned Netflix, all the way back in 2022, the position was exited at a hefty loss.
The new thesis is simple: Netflix is officially the champion of the streaming wars, and the entertainment company is now positioned to grow even more. Is he right, and should retail investors follow suit?
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Netflix aims to increase its global market share
The case for buying Netflix is strong. If we look at Netflix's valuation and price, the stock has fallen more than 30% over the past 12 months, bringing down its forward and trailing P/E ratios to 24. The streaming giant is trading at less than 7 times its sales. The metrics are appealing right now, particularly at a moment when its profitability is improving and its ambitions are expanding.
Netflix is diversifying its offerings beyond just film and television. Podcasts, live events, and gaming are introducing Netflix to new audiences and deepening engagement among current subscribers. It's also using localized content to help grow its international subscriber base.
Image source: Getty Images.
Buying Netflix isn't without risks. It is a highly competitive market where new streamers can quickly steal subscribers' attention. But Netflix has an advantage in its sheer size and reach. In the second quarter of 2026, Netflix revenue grew 13% year over year overall, with 21% growth in Latin America and 16% in Asia-Pacific, specifically.
Netflix is the king of streaming and is now aiming for global domination and to capture more of our attention through other mediums. More than any other entertainment company, Netflix has the money and the skill to achieve its long-term goals. Bill Ackman is bullish on Netflix, and so am I.
Should you buy stock in Netflix right now?
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Catie Hogan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Netflix. The Motley Fool has a disclosure policy.
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