After a trivial deal between two companies about AI content, Barron’s wrote a headline that read, “Netflix Rival Strikes Deal With Google in Battle for AI Content.” The deal in question was for the French company Canal+ to offer subscribers a better way to choose the content they preferred. Of course, the deal involves AI. What company that could use “AI” in a headline could resist the temptation to use it?
The contract specifically allows Canal+ to use Veo3, which is Google’s generative AI video technology. Canal+ Chief Technology Officer Stéphane Baumier commented: “This strategic partnership paves the way for limitless possibilities.” Really?
Netflix (NASDAQ: NFLX) doesn’t have a rival. One can make the argument that Alphabet’s (NASDAQ: GOOG) YouTube is, but it is a relatively new premium subscriber service. One can argue that Amazon Prime Video is. However, the service is tied to other Amazon services.
It is worth looking back at Netflix’s last earnings (and to forget about the wild decision to buy Warner). Revenue was up 17.6% to $12.1 billion year over year. Net income rose from $1.7 billion to $2.4 billion.
And Netflix posted strong guidance. “For 2026, based on F/X rates as of 1/1/2026, we forecast revenue of $50.7B-$51.7B. This represents 12%-14% year over year growth (or 11%-13% F/X neutral growth), driven by increases in membership and pricing plus a projected rough doubling of ad revenue in 2026 vs. 2025.”
Netflix’s stock crashed because of the stupid decision to try to buy parts of Warner Bros. Discovery (NASDAQ: WBD). It had nothing to do with Netflix’s fundamental financial health. Shares went from $134 in early July to $75 a month ago. As management came to its senses about Warner, the stock has recovered to $100.
Wall St. has several estimates about where Netflix shares will be in a month or a year. If it has home run earnings when it next announces them, count on a climb back toward the July number
Netflix has no rivals.
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