Netflix’s Path to a $1 Trillion Valuation by 2030
Netflix (NASDAQ: NFLX) stands out as one of the top-performing stocks in the 21st century, particularly shining amid recent market surprises. The streaming giant faced significant challenges in 2022, reporting two consecutive quarters of declining subscriber growth linked to post-pandemic adjustments. However, since then, Netflix has taken proactive steps by addressing password sharing, launching an advertising tier, and venturing into live sports—an area it typically shied away from.
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As a result of these tactical changes, Netflix has rejuvenated its growth trajectory in both revenue and profits, resulting in the stock’s price surge over the past three years. Currently, Netflix boasts a market capitalization exceeding $400 billion. According to a The Wall Street Journal report, company leadership is optimistic about reaching a $1 trillion valuation by 2030, which would necessitate a stock increase of 139% over the next five years, assuming a stable share count.
The question remains: Can Netflix achieve this ambitious goal? Let’s explore its future prospects.
Image source: Getty Images.
Assessing the Route to a $1 Trillion Valuation
Netflix has significantly distanced itself from competitors in the streaming market, particularly while traditional media outfits like Disney struggle in this domain. Last year, Netflix added over 40 million subscribers, pushing its total past 300 million. The management has set a target of 410 million subscribers by 2030, projecting a compound annual growth rate of approximately 5% over the next six years—equating to the addition of 18 million subscribers annually. Given Netflix’s historical growth rate of 25 to 30 million new subscribers per year, this target appears attainable.
In established markets such as North America, where Netflix has 90 million subscribers—about 75% of all broadband households—a slight slowdown is anticipated. Nevertheless, the company continues to attract new advertisers, having reduced ad rates. Importantly, in February, 43% of new subscribers signed up for the ad-supported tier, highlighting the potential for increased ad revenue, which surpasses that of subscriptions. Netflix’s shift away from quarterly reporting of subscriber numbers suggests a focus on overall revenue growth instead.
Looking forward to 2030, Netflix aims to elevate its ad revenue from an estimated $2 billion this year to $9 billion, part of a broader strategy to double annual revenue to $80 billion. The company also seeks to increase operating income from $10.4 billion last year to $30 billion. Achieving these goals would position the company favorably for a $1 trillion market capitalization.
Is Netflix a Good Investment?
While tripling operating income in six years poses challenges, Netflix has multiple advantages that could facilitate this growth. Notably, its advertising business has gained traction, and the company is expected to transition from Microsoft as its ad tech partner to a proprietary system, which could enhance profitability in the long run. Similarly, as Netflix branches into new content categories such as live sports, it may minimize the costs associated with expanding its subscription base.
Currently, Netflix trades at a price-to-earnings ratio of 49, indicating that much of its growth potential is already reflected in its stock price, posing a hurdle to hitting the $1 trillion market cap in five years. However, reaching this valuation is not a prerequisite for Netflix to be a favorable investment or to outperform the S&P 500.
The company is well-positioned to navigate the ongoing trade war and economic uncertainties, offering a service that is not subject to tariffs. Additionally, as an entertainment option, Netflix may be seen as more economical compared to outings to movies or live shows, making it appealing even during recessionary periods. As of April 14, Netflix’s stock is trading higher than it was on April 2 when President Trump announced global tariffs, demonstrating its resilience.
Despite its high price, Netflix’s strong performance and adaptability make it a compelling buy in today’s market.
Should You Invest $1,000 in Netflix Now?
Before making an investment in Netflix stock, consider the following:
The Motley Fool Stock Advisor team has recently highlighted what they believe are the 10 best stocks to invest in right now, and Netflix is not included. The selected ten stocks are projected to provide substantial returns in the future.
For context, when Netflix was recommended on December 17, 2004, a $1,000 investment would now be worth $524,747.* Similarly, if you invested $1,000 in Nvidia on April 15, 2005, it would now be worth $622,041!*
It’s noteworthy that the Stock Advisor has an impressive total average return of 792% compared to 153% for the S&P 500. Don’t miss the latest top 10 list available to Stock Advisor.
*Stock Advisor returns as of April 14, 2025
Jeremy Bowman has positions in Netflix and Walt Disney. The Motley Fool has positions in and recommends Microsoft, Netflix, and Walt Disney. The Motley Fool recommends long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.
The views and opinions expressed herein reflect those of the author and may not necessarily represent those of Nasdaq, Inc.
