Ought to You Purchase Netflix Inventory Earlier than Jan. 6?

2024 was one other nice yr for buyers. The S&P 500 and Nasdaq Composite gained 24% and 30%, respectively, thanks largely to tailwinds fueled by synthetic intelligence (AI), blockbuster weight reduction medication, and even some shopper resiliency given a steadily bettering macroeconomic image.

One firm that quietly had a milestone yr in 2024 is streaming platform Netflix (NFLX -1.01%), which gained 85% and is at the moment buying and selling close to all-time highs.

I’ll break down why 2024 was such a pivotal yr for Netflix. Extra importantly, I will even be detailing why buyers ought to regulate the inventory as Jan. 6 quick approaches.

2024 was a transformational yr for Netflix

Netflix is finest identified for its huge content material library — spanning each style from comedies and thrillers to cartoons and anime, and rather more. During the last a number of years, Netflix has invested important capital into its personal unique content material, putting offers with Hollywood’s greatest stars and creating new tv sequence and films which are unique to the Netflix platform.

For a while, this technique helped Netflix separate itself from different streaming platforms, whereas additionally giving the corporate new methods to attraction to viewers who could also be uninterested in watching reruns of previous, syndicated content material.

Nevertheless, creating unique content material is a blueprint that is simple to comply with. Different streaming providers supplied by Amazon, Apple, Paramount, and Disney have adopted go well with. In consequence, Netflix has been confronted with the daunting process of differentiating itself from different streamers, whereas additionally sustaining an applicable degree of buyer acquisition prices.

During the last yr, Netflix swiftly moved into its subsequent massive class: Reside sporting occasions. To be honest, Amazon and Apple additionally provide a point of dwell sports activities with the NFL and Main League Baseball. Nevertheless, Netflix’s strategy is a bit completely different, and beneath I will define simply how profitable this marketing campaign has been thus far.

Right here is how dwell occasions have carried out on the platform

In 2024, Netflix’s two high-profile dwell sporting occasions included a boxing match between YouTube star Jake Paul and boxing legend Mike Tyson, and streaming the NFL video games on Christmas Day.

In response to knowledge compiled by TVision, the Paul-Tyson match was probably the most streamed sporting occasion in historical past, reaching an estimated 108 million dwell viewers around the globe. Nielsen estimates that every of the NFL video games on Christmas reached a median of 24 million viewers, making them two of probably the most streamed video games in NFL historical past.

Whereas Netflix’s expertise in sporting occasions is restricted, early outcomes are indicating that the corporate’s ambitions in dwell broadcasting are paying off. On Jan. 6, Netflix will likely be unveiling its newest mission in dwell leisure — this time that includes wrestling content material from WWE Uncooked.

Picture supply: Getty Photos.

Is Netflix inventory a purchase earlier than Jan. 6?

The Jake Paul-Mike Tyson match came about on Friday, Nov. 15, 2024. Because the chart beneath illustrates, shares of Netflix popped as excessive as 14% following the occasion, and have gained a web of 10% by means of Dec. 30.

NFLX knowledge by YCharts.

Apparently, within the days main as much as the Christmas Day NFL video games, Netflix inventory skilled a fleeting pop. Nevertheless, as I write this, shares of Netflix have dropped by roughly 3% following the video games.

Given these two knowledge factors, I believe it is honest to say that Netflix inventory has witnessed some pronounced momentum across the instances of its dwell occasions. Typically, I are inclined to discourage investing in momentum shares given their irregular ranges of volatility.

To me, shopping for Netflix inventory earlier than Jan. 6 is just not so necessary. The extra necessary concept right here is that Netflix’s dwell occasions have thus far been record-setting broadcasts. Whereas there is no such thing as a assure that the WWE Uncooked marketing campaign will comply with the identical path because the Paul-Tyson match or NFL video games, I believe there is a good probability that wrestling may turn out to be one other tailwind for Netflix.

I see dwell occasions turning into an infinite alternative for Netflix, and I’m bullish on the corporate’s capability to strike extra partnerships throughout sports activities and leisure in the long term.