Netflix just popped onto the Investor's Business Daily Breakout Stocks Index alongside Magnificent Seven stocks Meta Platforms, Microsoft, and Google parent Alphabet. Now, as Netflix stock looks to break out to an all-time high, it has set its digital crosshairs on fellow entertainment giant Disney.
As a feature story in IBD noted earlier this month, the premium streaming wars are over, and Netflix won. Now the streaming pioneer plans to spread its wings and transform into an entertainment conglomerate, looking to emerge as a next-gen Disney.
See Who Joins Netflix On The IBD Breakout Stocks Index
Netflix Vs. Disney: It's (Sort Of) A Small World With Big Ambitions
In terms of revenue, Disney dwarfs Netflix. Last quarter, the House Of Mouse generated $23.6 billion in sales. Netflix posted a 16% gain to $11.1 billion.
Netflix hopes to double revenue by 2030. According to The Wall Street Journal, the company aims to reach a market capitalization of $1 trillion. As of Wednesday's close, Netflix's market cap stands at just over $516 billion. But that already more than doubles Disney's $210 billion market value despite much smaller revenue for Netflix.
Netflix's bold ambition to become the Disney of the next generation includes forays into video games, live sports and other live programs, as well as in-person attractions.
"What can go wrong?," MoffettNathanson analyst Robert Fishman asked about Netflix's big plans. Positive on Netflix stock, he told IBD that these aggressive initiatives are "how the company continues to sustain the level of growth that they are at."
What Aiming To Be The Next Disney Could Mean For Netflix Stock
Rising Fund Ownership Lifts Netflix Stock
Rattled by Tuesday's sell-0ff on the Nasdaq, IBD Breakout Stocks Index members Netflix, Meta Platforms, Microsoft and Alphabet all retreated.
The slide continued Wednesday as the tech-heavy index sliced below its 21-day exponential moving average. But the Nasdaq erased much of day's losses to close just below that line.
Netflix has dropped below its 50-day line but has so far held above its 21-day benchmark. It bounced of that line Wednesday to close essentially flat. The stock continues to work on a second-stage flat base with a 1,341.15 buy point.
Although the relative strength line has retreated below its 52-week high, it has shown signs of starting to bend higher. In a sign of enduring demand, Netflix stock has seen eight quarters of rising fund ownership.
As Netflix tries to show resilience, trouble in market indexes cautions investors to heed sound rules for how to buy stocks and when to sell.
Google stock, which has earned a spot on IBD Leaderboard alongside Netflix, has slipped in recent days but remains within a 197.95-207.85 buy zone after clearing a 26-week long cup with handle.
On Monday, shares of Meta gapped down as questions regarding the company's artificial intelligence and metaverse push came into focus. It fell for a third straight day Wednesday, retreating but found support above its 50-day line.
Microsoft stock has shown similar action, testing its 50-day benchmark on Wednesday.
Meanwhile, Disney remains mired below its 10-week moving average as it tries to start coming out of its slump by forming a new flat base. The stock pulled off a small gain on Wednesday.
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