Netflix surges on refocusing on fundamentals

What happened: Netflix's stock surged in recent weeks, up nearly 20% from its 52-week low, following strong Q3 earnings that saw the company gain subscribers and report double-digit growth. The stock hit a new low after Q2 earnings but has since rallied, likely due to its attractive valuation. Netflix remains on track for its 2026 financial plan, with management guiding for 12% revenue growth in Q3 and 13% to 14% full-year growth.

Market impact: The streaming giant's resurgence has positively affected growth-oriented investors and the broader entertainment sector. Its strong earnings and subscriber growth have boosted confidence in the company's fundamentals, driving its stock price higher. Competitors like Disney+ and HBO Max may face increased pressure to deliver robust growth to maintain their market positions.

What to watch next: Netflix's Q4 earnings call on January 19, 2023, will provide insights into subscriber growth and revenue trends heading into 2023. Additionally, investors will closely monitor the company's progress in expanding its offerings to gaming, advertising, and live events. Lastly, any updates on Netflix's 2026 financial plan will be crucial in maintaining or reversing the current bullish narrative.