Netflix aims for trillion-dollar company status as its economic impact goes ‘overlooked,' says co-CEO
Becoming a trillion-dollar company is 'a long-term ambition,' Ted Sarandos, co-CEO of Netflix told the audience during a fireside chat at Semafor's World Economy Summit in Washington, D.C., on Wednesday. Netflix's streaming services account for about 10% of total TV watching, and the company has 'enormous room to grow,' he said. 'In the previous five years, we doubled our revenue, we grew profits 10 times, and we grew our market cap three times,' he added.
There's a path to a $1 trillion market cap, Sarandos said. 'But it all is dependent upon executing well,' he said. Sarandos noted that creating in-person experiences for Netflix's most popular shows, like the 'Squid Game Experience' or creating consumer products based on shows, are additional revenue streams. The trillion-dollar club currently includes members such as several Big Tech companies and Berkshire Hathaway, the first non-tech company in the U.S. to reach a $1 trillion market cap.
Netflix, which Sarandos referred to as a tech and entertainment company, is moving full-speed ahead despite economic uncertainty that is pressuring consumer discretionary spending. The company released its first-quarter earnings results on April 17. For the quarter, Netflix beat analyst expectations on both revenue and profit. Revenue totaled $10.54 billion compared with estimates of $10.51 billion, while earnings per share of $6.61 surpassed analyst estimates of $5.71.
"We prioritize profitable growth by reinvesting in the business," Netflix CFO Spence Neumann said during the earnings call. "We maintain ample liquidity. Those are key for us, our top two priorities." On the call, executives pushed the idea that the company's wide range of subscription plans—including one with ads for $8 monthly—provides customers with flexibility if they want to save money, Fortune reported.
During the discussion on Wednesday, Sarandos estimated that Netflix's impact on the U.S. economy from 2020 to 2024 included $125 billion in contributions. In addition, 140,000 production jobs, and 500 productions across all 50 states, he said.
However, the entertainment industry 'certainly is overlooked' when it comes to U.S. trade deals, Sarandos said. 'We get kind of thrown under the bus on trade deals occasionally,' he said. 'You hardly ever see a sitting president photographed on a studio lot.'
'We announced a billion-dollar investment in production in Mexico with president [Claudia Sheinbaum] at her morning press conference,' Sarandos explained. 'I was thinking if we were building a plant to build a billion dollars worth of cars there, the [U.S.] president would certainly announce that.'
Although the entertainment industry isn't currently in the spotlight as much as manufacturing, Netflix resonates with popular culture. The audience at the event was certainly familiar with the company's breakaway hit miniseries "Adolescence."
'It's a remarkable feat in technical storytelling,' Sarandos said of the show.
Sheryl Estradasheryl.estrada@fortune.com
This story was originally featured on Fortune.com
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Yahoo
an hour ago
- Yahoo
Buffett's $6B Donation: Generous Gesture or Market Mover for Berkshire Hathaway (BRK.B)?
Berkshire Hathaway Inc. (NYSE:BRK-B) is . On June 30, it emerged that renowned investor and CEO, Warren Buffett plans to donate $6 billion worth of company shares. The donation is to be given to the charities of the billionaire investor's choice. Buffett is to give away $12.36 million of the company's shares to five charities. The Bill & Melinda Gates Foundation trust is the largest beneficiary, poised to receive 9.4 million Berkshire Hathaway shares. The Susan Thompson Buffett Foundation is to receive 943,384 shares. The Buffett Children's Foundation, the Sherwood Foundation, the Howard G. Buffett Foundation, and the NoVo Foundation are to receive 660,366 shares each. Buffett has donated over $60 billion since he started donating his wealth in 2006. Berkshire Hathaway Inc. (NYSE:BRK-B) is a multinational conglomerate holding company with investments in diverse industries, including insurance, rail transportation, energy, manufacturing, and retail. It also has significant investments in publicly traded companies. While we acknowledge the potential of BRK-B as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock. READ NEXT: and . Disclosure: None.
Yahoo
2 hours ago
- Yahoo
1 Warren Buffett Stock Trading at a Once-in-a-Decade Valuation to Buy Now and Hold Forever
Warren Buffett is great at identifying companies with wide competitive moats trading at compelling valuations. This company has built a moat with its brands and barriers to entry. And its stock trades at a valuation as low as it's ever been in the last decade. 10 stocks we like better than Diageo Plc › Warren Buffett has made himself and the investors in Berkshire Hathaway (NYSE: BRK.A) (NYSE: BRK.B) very wealthy by identifying companies trading at great value relative to their long-term outlook. Often times, political and economic environments will dull the near-term outlook for a business. Those are often opportunities for Buffett, particularly if he can identify impacted businesses that exhibit wide competitive moats. You can see that in some of Buffett's most recent purchases. For example, he has invested heavily into Constellation Brands (NYSE: STZ), which distributes some of the most popular Mexican beer brands in the U.S. Import tariffs threatened its core business, but it saw some relief as the tax on alcohol has been waived (but not the tax on the aluminum cans the drinks come in). Over the long run, however, it should be able to keep growing, making it a smart investment for those willing to buy and hold. But another Buffett investment looks like even better value with a decade-low earnings multiple and an even stronger business and competitive moat. Here's the Buffett stock value investors should buy now and hold forever. President Donald Trump's tariffs are a threat to any company relying on importing products into the United States. With a rise in costs for distributors or retailers, imports are set to see a rise in price to help offset those tariffs. While most of them are currently paused, the Trump tariffs are set to go into effect on July 9. That's bad news for companies that don't have much pricing power versus comparable low-cost replacements from domestic providers. But companies with unique products, brands, or limited domestic competition will fare much better in the face of Trump's tariffs. That's why Diageo (NYSE: DEO) looks like a great opportunity for investors right now. Diageo is the company behind brands including Johnnie Walker, Tanqueray, Ketel One, Don Julio, and many other premium spirits. It's also the home of Guinness, the iconic Irish stout. Its portfolio includes over 200 brands, and its sales span 180 countries. However, 39% of the company's sales were in North America last year. That means tariffs will take a big bite out of its business. Management estimates the 10% tariff will cost the company about $150 million per year. As such, distributors imported additional units into the U.S. last quarter, artificially inflating its net sales growth to 5.9% year over year. Investors should expect margin deterioration this quarter, management says, but sales growth may only fall back modestly. In other words, management is weathering the storm pretty well. The damage would be far worse if it weren't for the strength of Diageo's brands and its competitive position. Diageo's biggest moat comes from its brand names. While its portfolio spans all sorts of price points, it has put a significant focus more recently on acquiring and building premium brands. Not only does that give it more leeway to increase prices (since it doesn't compete on price), it also plays into the trend for drinkers focusing on higher quality spirits. Diageo's whisky brands like Johnnie Walker and Lagavulin benefit from the limited locations for scotch production. And it's tough for new competitors to enter the market because the aging process is an important factor for spirits like scotch, especially on the high end. Johnnie Walker Blue is a blend that includes rare whiskys aged as long as 60 years. In other words, there aren't very many replacement products for Diageo's spirits. That's further supported by management's expectations to exhibit operating leverage in 2026 and beyond, which should result in strong earnings growth. Even with mid-single-digit revenue growth, earnings per share should grow closer to 10% when combined with its share repurchase program. Management will pay a growing dividend each year on top of that. And with shares trading at a price-to-earnings ratio of just 15.6, near a decade low, the stock looks like an absolute bargain right now. Before you buy stock in Diageo Plc, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Diageo Plc wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $697,627!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $939,655!* Now, it's worth noting Stock Advisor's total average return is 1,045% — a market-crushing outperformance compared to 178% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of June 30, 2025 Adam Levy has positions in Diageo Plc. The Motley Fool has positions in and recommends Berkshire Hathaway. The Motley Fool recommends Constellation Brands and Diageo Plc. The Motley Fool has a disclosure policy. 1 Warren Buffett Stock Trading at a Once-in-a-Decade Valuation to Buy Now and Hold Forever was originally published by The Motley Fool Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
2 hours ago
- Yahoo
Prediction: 2 Stocks That'll Be Worth More Than Berkshire Hathaway 10 Years From Now
Berkshire Hathaway is the only nontechnology company with a trillion-dollar market cap. Bank of America could benefit from favorable bank industry tailwinds. AMD could have a massive growth opportunity thanks to artificial intelligence (AI) and other major tech trends. 10 stocks we like better than Bank of America › Berkshire Hathaway (NYSE: BRK.A)(NYSE: BRK.B) is the largest company in the stock market not in the technology sector. As of this writing, the conglomerate led by Warren Buffett had a market cap of about $1.05 trillion -- a tremendous accomplishment for a business built on value investing principles and long-term compounding. There are nine members of the trillion-dollar club in the U.S. stock market right now (Berkshire is No. 9). But it's safe to say that over the next decade, there will likely be many companies that achieve a 13-figure valuation. For many, doing so wouldn't be too much of a stretch. For example, Walmart and Visa currently have valuations of $776 billion and $675 billion, respectively, so both could get to $1 trillion over the next decade with even modest annualized returns. On the other hand, there are some that I think have an excellent chance of getting there through excellent stock performance. Here are two in particular that would need to deliver multibagger returns to investors in order to join the trillion-dollar club, and that I feel have a strong chance of getting there. Bank of America (NYSE: BAC) has a $353 billion market cap today, and is one of the largest banks in the world. To achieve a $1.05 trillion market cap like Berkshire has, it would require the stock to average about an 11% annual gain over the next decade. This is certainly within the realm of possibilities, as I feel the conditions for the banking industry will be generally favorable -- at least for the next few years. Most economists predict that the general direction of interest rates will be lower over the coming years, and this should help boost loan demand and reduce deposit costs. Plus, the Trump administration is not only likely to generally loosen regulations going forward, but also campaigned on a 15% corporate tax rate, which would be a big benefit to Bank of America's bottom line. CEO Brian Moynihan and his team have done an excellent job of embracing modern banking technology and creating a more efficient operation, and the bank's overall efficiency and return on assets (ROA) is likely to trend in the right direction as a result. In short, a combination of excellent leadership and favorable economic and political conditions could certainly lead to a trillion-dollar valuation. One caveat is that Bank of America is one of the larger stock positions in Berkshire's portfolio, so if it performs well, it would also have the effect of raising Berkshire's market value. But even so, if the economic environment cooperates, Bank of America is a well-run institution and could certainly deliver excellent returns over the next decade. Advanced Micro Devices (NASDAQ: AMD), better known simply as AMD, has performed quite well over the past few months, rebounding sharply from the April lows. But I think it's just getting started. The chipmaker has a current market cap of $233 billion, so it would need a roughly 16% annual gain over the next decade to reach Berkshire's $1.05 trillion. And I think it has an excellent shot of getting there. AMD often gets ignored by investors because it is a distant second place to Nvidia when it comes to the high-momentum data center GPU market. But there are a few things to keep in mind. For one thing, the data center accelerator market is a massive and fast-growing one, expected to reach $240 billion in global sales volume by 2030. So, even if AMD can boost its market share by just a few percentage points, it would be a big win for the company's top line. It's also important to realize that while data center chips are the fastest-growing part of the business right now, there's a lot more that AMD does. For one thing, it has steadily been taking share from Intel in the PC and laptop processor market. It also makes chips for autonomous vehicles, an area expected to grow rapidly over the next decade or so. Ever since CEO Lisa Su took the reins in late 2014, it has been a mistake to bet against AMD. During her tenure, AMD has delivered a staggering 4,180% gain for investors (about 40% annualized). While I don't exactly think that performance level will repeat itself, it wouldn't need to for AMD to reach a trillion-dollar valuation. To be clear, I'm predicting both of these companies will have a higher market cap in 10 years than Berkshire Hathaway does today. Assuming Berkshire delivers 10% annualized returns over the next decade, which would be historically low for the conglomerate, it would have a market cap of about $2.7 trillion a decade from now, which obviously would be less likely for both of these companies to achieve (but it wouldn't be impossible). The key point is that both Bank of America and AMD have fantastic leadership and a high probability of an excellent growth environment over the next decade. Of course, there's a lot that would need to go well for either to achieve a trillion-dollar valuation within the next decade, but the risk-reward dynamics of both stocks look excellent right now. Before you buy stock in Bank of America, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Bank of America wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $697,627!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $939,655!* Now, it's worth noting Stock Advisor's total average return is 1,045% — a market-crushing outperformance compared to 178% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of June 30, 2025 Bank of America is an advertising partner of Motley Fool Money. Matt Frankel has positions in Advanced Micro Devices, Bank of America, and Berkshire Hathaway. The Motley Fool has positions in and recommends Advanced Micro Devices, Bank of America, Berkshire Hathaway, Intel, Nvidia, Visa, and Walmart. The Motley Fool recommends the following options: short August 2025 $24 calls on Intel. The Motley Fool has a disclosure policy. Prediction: 2 Stocks That'll Be Worth More Than Berkshire Hathaway 10 Years From Now was originally published by The Motley Fool
