Netflix Stock Is Crushing the "Magnificent Seven" in 2025. Is It a Buy?

Netflix Stock Is Crushing the "Magnificent Seven" in 2025. Is It a Buy?

By Steven Orlowski, CFP, CNPR

In a year dominated by volatility, macroeconomic uncertainty, and shifting tech trends, Netflix (NASDAQ: NFLX) has emerged as a surprising standout — even among the elite tech titans of the so-called "Magnificent Seven" (Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia, and Tesla). Year-to-date, Netflix stock is up more than 45%, outpacing most of its mega-cap peers and reigniting investor interest in a company that many thought had plateaued post-pandemic.

So, what’s driving the streaming giant’s stellar performance in 2025 — and more importantly, is it still a buy?

---

Streaming’s Survivor: Netflix’s Resurgence

After years of competitive saturation and content spending wars, Netflix is reaping the rewards of strategic pivots made in 2023 and 2024. The company doubled down on profitability, restructured its content pipeline, and expanded globally — not just with new markets, but with hyper-localized content that’s delivering huge subscriber growth in regions like Southeast Asia, Africa, and Latin America.

Netflix’s ad-supported tier, launched to lukewarm reception in 2022, has become a quiet juggernaut. In Q1 2025, ad revenue grew 38% year-over-year, accounting for nearly 25% of total revenue. The company’s focus on monetization, including password-sharing crackdowns and improved ARPU (average revenue per user), has solidified its financial footing.

Crushing the Competition

Compare that to the broader Magnificent Seven: Apple is grappling with sluggish hardware sales and regulatory pressure; Tesla is facing fierce EV competition and margin erosion; and Meta’s metaverse bets continue to burn cash with limited user adoption.

Meanwhile, Netflix’s fundamentals are stronger than ever:

• Q1 2025 Revenue: $11.2 billion (up 16% YoY)

• Operating Margin: 24%, a record high

• Global Subscribers: 290 million (up 9% YoY)

• Free Cash Flow: $3.1 billion

Investors are taking note. With Netflix consistently beating earnings estimates and issuing strong forward guidance, the stock has become a magnet for growth and GARP (growth at a reasonable price) investors alike.

---

Valuation Check: Is Netflix Still a Buy?

Despite its recent run-up, Netflix’s valuation remains compelling compared to its tech peers. As of April 2025, Netflix trades at a forward P/E of around 29 — modest when stacked against Nvidia (45x), Amazon (62x), and Tesla (70x).

Analysts are increasingly bullish. According to FactSet, 21 out of 30 covering analysts rate NFLX as a “Buy” or “Strong Buy,” with an average 12-month price target of $730 — about 12% above current levels.

However, risks remain. Content costs continue to pressure margins, competition from YouTube, Disney+, and regional platforms is intensifying, and any global economic slowdown could hit discretionary spending on entertainment.

---

The Bottom Line

Netflix is no longer just a streaming company — it’s becoming a media-tech hybrid with global scale, monetization depth, and a clear growth trajectory. In 2025, while the rest of the Magnificent Seven recalibrate, Netflix is executing.

Is it a buy? If you're looking for a growth stock with improving fundamentals, reasonable valuation, and dominant market position, Netflix may still have room to run.

Disclosure: The author has no position in any of the stocks mentioned at the time of publication.