Following Netflix’s latest earnings report, CNBC’s Jim Cramer reaffirmed his bullish stance on the company, expressing increased optimism about its future. He praised Netflix’s management for their outlook on growth and content, highlighting that the company has addressed concerns about sustaining its momentum.
“If you were worried about Netflix not having enough strategies to drive growth or enough justification for its high price-to-earnings ratio, I think those worries have been dispelled by last night’s earnings report,” Cramer remarked. He believes Netflix’s strong quarter will keep the bears in check for now but warns that when they reemerge, investors should remember the company’s solid fundamentals, which he thinks can “rock on higher for a long time.”
Netflix’s recent performance exceeded Wall Street’s expectations, with impressive earnings, revenue, and paid membership growth figures. The company’s stock surged by 11% on Friday and maintained those gains through the close.
Cramer was particularly encouraged by the company’s positive guidance for the next quarter and into 2025, dispelling investor fears about maintaining double-digit revenue growth. He also praised co-CEO Ted Sarandos for detailing Netflix’s extensive content library and strong user engagement, pointing out that on average, users watch two hours of content daily. Instead of bundling content with other services as some competitors do, Netflix is focused on adding more value to its platform.
The breadth of Netflix’s content offerings, such as popular shows like Emily in Paris, Selling Sunset, and Squid Game, along with two NFL games set to stream on Christmas, make Cramer optimistic about the company’s ability to grow its ad-tier. Sarandos’ positive view on how AI will impact Netflix’s business also adds to this optimism.
While Cramer clarified that he does not see Netflix becoming an AI-driven company, he believes that its growing content library, successful ad-tier model, and potential to leverage artificial intelligence will lead to substantial financial gains. “We have a lot of positives here, and it’s going to translate into a lot of money,” he concluded.