Shares of Netflix (NASDAQ:NFLX | NFLX Price Prediction) have been quietly beating the market so far this year, with 5% gain year to date compared to a nearly 5% loss in the S&P 500 and Nasdaq 100. And when you compare the video streamer to the likes of the Magnificent Seven (they’re the Lag Seven for 2026), and the relative outperformance becomes even more striking. Indeed, even amid the conflict in Iran and fears of excessive AI spend, Netflix has been acting as a pillar of stability for portfolios.
Of course, if things really get bad, and the oil spike (it costs just under $100 per barrel right now) causes inflation across a broad range of goods, the consumer is going to feel it. But even if the budget gets tighter, I just don’t see Netflix on the list of things to cut. Arguably, staying in to binge-watch Netflix is the more economical option than going out for dinner and a movie.
Netflix is increasing prices once again
Either way, Netflix stock may very well be one of the more economically resilient high-tech plays on the market. Even when times are bad, you just can’t miss that latest season of Stranger Things or the many surprise dramas that the Netflix algorithm may serve up to you based on your likes. Even with the latest price hikes, Netflix remains one of the services that has remarkable pricing power. Of course, it feels like it wasn’t all too long ago that the streaming platform raised the bar on its prices.
As it does so again, I think consumers will either take the hit, given the mileage (think all the streamed hours) they get out of a monthly subscription, or just trade down to the ad-based tier. Any way you look at it, Netflix has options, and they’re positioned to win, even when the consumer falls under pressure, whether it’s through a higher ticket price for the premium option or more ad viewership.
Even for the hardest-hit consumer, a $1.00 price hike on an ad-based tier won’t leave a huge dent in the monthly budget. Though, perhaps the $2.00 hike to premium could cause some to consider their options. Either way, Netflix has a pretty defensive business with immense pricing power. And until signs show that’s changed, the stock might be a worthy addition for when the waves of volatility move through tech.
Forget Warner Bros. Discovery: Live sports and AI are tremendous growth pathways for Netflix to invest in
It’s not just price increases that could help give Netflix a jolt, though. The company isn’t just a steady utility; it also stands to gain significantly as it embraces AI while also looking to make a bigger splash into live sports. Of course, Netflix has waded into the live sports waters slowly and steadily, with WWE, Boxing, and Football.
Now, it’s getting into MLB and MMA (mixed martial arts). If Netflix brings on more pay-per-view (PPV) level fights, whether it be in boxing or MMA, I do think that there’s disruptive potential here. In many ways, the coming Ronda Rousey vs. Gina Carano is the mega-fight that fans wanted to see for decades. In any case, it’s these ambitious events that might make Netflix a subscription that’s virtually impossible to cancel. And all it takes are a few big events scattered throughout the year to keep sports fans stuck on the platform for good.
In my view, Netflix doesn’t need Warner Bros. Discovery assets to raise prices; it already has the pricing power, and if it instead spends the big money on live sports, I think it could continue raising prices with little, if any, resistance on the part of subscribers. If the streamer raises prices by too much, too fast, for the premium tier? Well, it has the ad-based tier that could catch a subscriber before they head for the door.
Don’t forget about AI tailwinds
Over the longer term, I’d look for Netflix to embrace the “invisible AI” shift as it seeks to become more efficient at producing top-notch content.
As AI advances, production costs and time could nosedive. Add Ben Affleck’s AI production company InterPositive acquisition into the equation, and it’s clear that there are massive gains to be had from content producers and streamers in the era of AI. Further out, cloud and AI gaming might be another wild card that takes pricing power to yet another level.
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