Netflix Gears Up for Ambitious Growth with Eye on $1 Trillion Market Cap

Once a stronghold of industrial and energy stocks, the market landscape has dramatically shifted. Two decades ago, General Electric and ExxonMobil dominated with market capitalizations of $319 billion and $283 billion, respectively. Fast forward to today, and technology companies, particularly Apple and Microsoft, have taken the lead with market caps of $2.9 trillion and $2.7 trillion, respectively. This momentum is largely driven by the rapid adoption of artificial intelligence (AI).

Netflix (NASDAQ: NFLX) has been a key player in this AI revolution. The company has developed cutting-edge algorithms to enhance its streaming recommendations and inform production and licensing decisions.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Continue »

Recently, Netflix posted impressive growth figures in its latest quarter. With a market cap of $415 billion, the company aims to enter the trillion-dollar club by 2030. Investors have seen returns of 59% in the past year and an incredible 1,090% over the past decade, leading to optimism about Netflix’s ongoing success.

Image source: Getty Images.

Robust Financial Performance

Netflix recently unveiled its first-quarter results, surpassing expectations on key metrics. The company reported revenue of $10.54 billion, a 13% increase year-over-year. Profits also surged, evidenced by an earnings per share (EPS) of $6.61, which represents a 25% jump. This sales growth stemmed from significant subscriber additions and rising ad revenue. The net profit margin expanded by 360 basis points to 31.7%.

For context, analyst predictions had anticipated $10.5 billion in revenue and an EPS of $5.66, making Netflix’s performance notably impressive. It’s important to mention that the company has stopped disclosing subscriber numbers, a move it made last year.

Management expects this growth trend to persist. For the second quarter, Netflix forecasts a revenue increase to $11 billion, which would be over 15% higher year-over-year, with EPS anticipated at $7.03—up 44% compared to the prior year.

Future Ambitions

Recent reports, initially by The Wall Street Journal, detail Netflix’s ambitious objectives leading up to 2030:

• Double revenue from $39 billion to $78 billion by 2030
• Boost global ad revenue to $9 billion from an estimated $2.15 billion
• Triple operating income to $30 billion, up from $10 billion in 2024
• Increase the subscriber base to 410 million from approximately 302 million last year
• Achieve a $1 trillion market cap by 2030

While Netflix officials have downplayed the report, they did not dispute its content during a conference call. Co-CEO Ted Sarandos acknowledged the potential for internal discussions to leak out. He clarified that although these are not formal forecasts, they represent the company’s long-term thinking.

Growth Drivers

To support its ambitious targets, Netflix has crafted a multipronged growth strategy. Expect a strong focus on international markets, particularly Brazil and India, which are experiencing significant broadband penetration.

Additionally, Netflix’s advertising segment is gaining traction. The company launched its own ad-tech platform in the U.S. on April 1, with plans to expand into other advertising markets soon.

Highlighting its content strategy, Netflix’s popular program WWE Raw consistently ranks among its top shows globally. The company is also expanding its involvement in live events with the announcement of Taylor vs. Serrano 3, a major rematch in women’s boxing, and has optioned a second NFL Game for Christmas Day 2025.

Meanwhile, Netflix continues to produce hit content; the series Adolescence has become one of its most popular, with films like Back in Action, Ad Vitam, and Counterattack climbing the ranks on their respective Top 10 lists. Each of these avenues illustrates Netflix’s potential for further incremental growth.

Pathway to Valuation

With a current market cap of $415 billion, Netflix will need to achieve stock price increases of approximately 141% to reach a $1 trillion valuation. Nevertheless, a clear growth trajectory exists over the next five years. Analysts expect the company’s revenue to hit $44.31 billion by 2025, suggesting a forward price-to-sales (P/S) ratio of about 9.

To reach a $1 trillion market cap, Netflix would need to expand its revenues to around $106 billion annually, which could hinge on a manageable 15% annual growth rate to reach approximately $89 billion by 2030. This would position the company close to its trillion-dollar target, especially if market multiples expand.

Currently, Wall Street anticipates revenue growth of about 14% in 2025 and 12% in 2026, although analysts have historically underestimated Netflix’s performance.

Over the last decade, Netflix has impressively increased its quarterly revenue by 523% and net income by 7,000%. These figures suggest that analysts may be too conservative in their outlook. Notably, as illustrated in this quarter, Netflix often outperforms expectations, potentially accelerating its progress towards these ambitious goals.

Lastly, even though Netflix shares trade at roughly 38 times forward earnings—a rate some investors might perceive as high—this valuation may align with its strong growth trajectory and increasing opportunities for consistent double-digit growth.