Netflix’s stock closed at $698.54 on Tuesday, surpassing its previous high of $691.69 from November 2021. The 1.5% rally came after the company’s announcement of a 150% year-over-year increase in upfront advertising commitments, a direct affect from the streaming platform’s new ad-supported subscription tier.
Netflix Shares Hit Record Highs Again
Since May 2022, Netflix’s shares soared over 300% from their low point in May 2022, making it the only major publicly traded streaming company to recover to the all-time-high levels since COVID-19. Investors were drawn to the rapid subscriber growth as people stayed at home and the shares soared.
In contrast, other streaming companies have seen significant declines from their 2021 peaks: Disney is down 56%, Warner Bros. Discovery has plummeted 90%, and Paramount has dropped 89%. Meanwhile, Comcast, which owns Peacock, is down 35%, and Spotify, primarily an audio streaming service, is down 11%.
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Despite its impressive rebound, Netflix has still underperformed compared to the broader market, with the S&P 500 gaining 25% since November 2021, while Netflix’s shares have only risen by 1% during the same period.
Netflix’s market capitalisation reached $300bn on Tuesday, surpassing the combined valuations of Disney, Paramount, Spotify and Warner Bros. Discovery. This recovery follows a challenging 2022, when Netflix experienced its first subscriber losses in over a decade and a significant drop in market value. However, steady subscriber growth, driven by a crackdown on password sharing and the introduction of an ad-supported tier, has renewed investor confidence.
