Quick Read
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Ackman returned to Netflix with a $1 billion position after losing $400 million in 2022, betting the ad tier’s $3 billion revenue target validates the comeback.
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Netflix collected a $2.80 billion termination fee walking away from WBD while Disney still struggles to build streaming margins that rival Netflix’s scale.
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Viewing hours grew just 2% in the first half of 2026 and content costs are rising 10%, keeping Wells Fargo’s Underweight rating firmly intact.
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Bill Ackman is betting on Netflix (NASDAQ:NFLX) again. Pershing Square’s second-quarter filing revealed a Netflix position worth roughly $1 billion, about 5% of the portfolio, alongside new stakes in payment networks and a full exit from its Google-parent holding.
The prior attempt ended badly. Ackman bought Netflix in 2022 after a subscriber-growth panic, then dumped the entire position within about three months, absorbing a reported $400 million loss. He conceded at the time that Pershing had “lost confidence in our ability to predict the company’s future prospects with a sufficient degree of certainty.”
He is buying into weakness again. Netflix closed at $71.79 on September 18, down 40.56% over the past year and 23.43% year to date.
What Actually Changed Since 2022
Netflix has “effectively won the streaming wars”, with a subscriber base that “exceeds any competitors by a wide margin”.
Netflix passed 325 million paid subscribers in 2025 and generated $9.46 billion of free cash flow, up 36.68% year over year.
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Walt Disney (NYSE:DIS) is still stitching Disney+, Hulu and ESPN into a bundle capable of Netflix-caliber margins, and Warner Bros. Discovery (NASDAQ:WBD) is the counterfactual: Netflix walked away from acquiring it and collected a $2.80 billion termination fee instead.
Advertising is the mechanism behind the thesis. Netflix guided ad revenue to $3 billion in 2026, roughly doubling from over $1.5 billion in 2025.
The ad tier drove more than 60% of Q1 sign-ups in ad markets, with advertiser count up 70% year over year to more than 4,000 clients.
Co-CEO Greg Peters called the gap between ad-tier and standard-plan revenue per member “near-term under-realized revenue growth,” signaling pricing power ahead.
Why the Bear Case Still Holds Up
Growth is decelerating into guidance. CFO Spence Neumann framed 2026 as “13% to 14% top line growth for the full year” and “about $6 billion of incremental revenue year over year”.
Viewing hours grew only 2% in the first half of 2026, and Wells Fargo’s Steven Cahall has an Underweight rating, citing softer engagement.
Valuation is no longer a bargain either, with a trailing P/E of 23x against an analyst target of $93.37.
Bull and Bear Case for NFLX Stock
The bull case is that Ackman is buying a scaled monopoly at a discount. Netflix returned $4.7 billion in Q2 buybacks with $27.1 billion remaining, and management sees Netflix capturing only 7% of the addressable revenue market.
The bear case is that engagement is stalling while content spend rises approximately 10% in 2026, and the failed Warner Bros. Discovery deal signals management is hunting for growth it cannot manufacture organically.
The deciding variable is the ad tier. If the $3 billion target lands and average revenue per member converges toward the standard plan, Ackman’s bet works. If not, the 2022 loss repeats.
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Disclaimer : This story is auto aggregated by a computer programme and has not been created or edited by DOWNTHENEWS. Publisher: finance.yahoo.com
