Netflix Shares Drop 10% as Investors Worry Over Valuation and Growth Outlook

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Netflix shares fell more than 10% on Wednesday after the company’s fourth-quarter forecast failed to impress investors, despite a slate of blockbuster titles including the final season of Stranger Things. The decline reflects growing concern that the streaming giant’s valuation — now trading at nearly 40 times forward earnings — has become unsustainably high.

The company reported third-quarter revenue of $11.5 billion, in line with expectations, and forecast $11.96 billion for the next quarter. However, investors were left uneasy by the lack of subscriber metrics since Netflix stopped reporting them earlier this year. Analysts said the market is looking for stronger signals of growth to justify the company’s lofty market position after a 360% stock surge over the past three years.

Netflix’s advertising and gaming divisions, launched to diversify its income, have yet to become major revenue drivers. Still, the company recorded its strongest ad sales quarter ever, without disclosing figures. A $619 million tax-related charge in Brazil also dragged down profits.

Analysts at Wedbush called Netflix’s outlook “underwhelming,” while Evercore ISI suggested buying the dip, noting rival platforms Disney+ and HBO Max have raised prices — potentially giving Netflix room to do the same.

Tesla Profit Misses Expectations Despite Record Sales and Revenue

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Tesla posted record third-quarter revenue of $28.1 billion, surpassing analyst estimates of $26.37 billion, but profits fell short due to rising costs, tariffs, and shrinking regulatory credit income. Shares dropped 4% in extended trading as investors reacted to the weaker earnings and fading government incentives that have long supported electric vehicle demand.

Profit per share came in at 50 cents, below the expected 55 cents. The company cited over $400 million in tariff-related costs and a 50% increase in R&D spending, largely tied to AI and robotics projects. Regulatory credit sales fell to $417 million from $739 million a year earlier, signaling continued decline.

Tesla’s gross margin stood at 18%, slightly above estimates, while automotive margins excluding credits reached 15.4%. To sustain demand amid expiring U.S. tax credits, Tesla launched lower-cost “Standard” versions of its Model 3 and Model Y, though analysts warned the move could compress profits further.

Despite the short-term challenges, Tesla remains focused on expansion. CEO Elon Musk said production of the Cybercab robotaxi, Semi truck, and Megapack 3 battery is set for 2026. The company’s energy division grew 81% in storage deployments, and Musk confirmed plans for mass production of the humanoid robot Optimus by late 2026.

Amazon Unveils Smart Glasses and AI Tools to Boost Delivery Speed

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Amazon has introduced new wearable technology and robotics aimed at accelerating delivery times and improving worker efficiency. At its “Delivering the Future” event in Seattle, the company showcased advanced eyeglasses for drivers, known internally as Amelia, which provide real-time navigation, package scanning, and photo capture for proof of delivery.

The smart glasses, equipped with a small display and controlled by a paired vest-mounted device, are designed to replace handheld GPS units. Amazon said the eyewear helps drivers stay focused and reduces time lost switching between devices — in some cases saving up to 30 minutes per shift. Hundreds of drivers have already tested the glasses, which will be distributed for free on an optional basis.

Amazon also unveiled Blue Jay, a new robotic arm that assists warehouse staff with picking and sorting tasks, and announced an artificial intelligence system for managing warehouse operations in real time. The company said these technologies will optimize “the last 100 yards” of delivery — the costliest part of logistics.

While Amazon’s automation drive is expected to streamline operations, reports indicate it could reduce U.S. hiring by 160,000 positions over two years. Shares of Amazon fell 1.8% on Wednesday to $217.95, marking a rare decline among major tech firms.