Netflix Inc NFLX amazed Wall Street with exceptional performance, reporting stellar subscriber numbers that sent its stock soaring 12.3% since its earnings announcement on Jan. 21. Notably, this is not just a win for Netflix, it’s also a golden moment for iconic chipmaker NVIDIA NVDA.
Netflix’s Big Win Shows Streaming is Here to Stay
Netflix had an amazing fourth-quarter of 2024, having gained 19 million new subscribers — the most ever added in a single quarter. This brought its total 2024 net additions to 41 million and its global memberships to 302 million.
Revenues grew 16% year over year to $10.25 billion and surpassed the Zacks Consensus Estimate of $10.12 billion, driven by strong content performance, advertising growth and increased membership. The company’s operating income rose 52%, and its profitability improved significantly.
Hits like Squid Game Season 2, Carry-On, and major live events, including the most-streamed NFL games and boxing match ever, fueled subscriber growth and engagement. Netflix expects continued momentum in 2025, forecasting revenue between $43.5 billion and $44.5 billion and expanding its advertising and live programming businesses.
Netflix’s Record Growth: An Opportunity for NVDA Stock?
NVIDIA stands to benefit from Netflix’s big subscriber win because Netflix relies heavily on advanced technology to deliver high-quality streaming to millions of people. NVIDIA makes powerful graphics processing units (GPUs) that help Netflix run its content smoothly, especially for high-definition video and future technologies like 4K and virtual reality.
As Netflix gains more subscribers, it needs to improve its technology infrastructure to handle the increased demand, and this is where NVIDIA’s GPUs come into play. More people watching Netflix means the need for more computing power, and NVDA’s technology is perfectly suited to meet this demand.
Last Word
As streaming platforms like Netflix grow, so does the demand for high-performance graphics and AI — the areas where NVDA excels. This is why NVDA could do well alongside Netflix, and is a good bet for investors. Both the stocks carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Notably, Wall Street’s average price target on NVDA suggests a 48.3% increase from its recent closing price of $120.07, with the highest target reaching $220.00, representing a potential gain of 83.2%. This indicates that current shareholders could see significant short-term benefits if the stock trends upward as projected.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
