Meet the Unstoppable Stock That Could Join Apple, Nvidia, Microsoft, Alphabet, Amazon, Meta, and Taiwan Semiconductor Manufacturing in the $1 Trillion Club by 2035

In This Article:

One of the biggest secular tailwinds in recent years is the advent of artificial intelligence (AI). The latest advancements in AI went viral early last year, and the list of companies in the $1 trillion club is littered with businesses on the leading edge of this next-generation technology.

For example, Apple products -- including Siri and Maps -- have always embraced AI, while Microsoft, Alphabet, Amazon, and Meta Platforms have developed seemingly impenetrable moats by integrating AI deeply into their respective business operations. Nvidia and Taiwan Semiconductor Manufacturing have developed the chips that make AI possible.

Netflix (NASDAQ: NFLX) is one of the pioneers of AI, using cutting-edge algorithms to inform its streaming recommendations and production choices, yet the company has fallen out of favor with some who are busy chasing the latest shiny new thing. Investors might be surprised to learn that Netflix just delivered another quarter of double-digit growth. With a market cap of just $324 billion, it might seem premature to suggest Netflix is bucking to join its peers in the trillion-dollar club, yet the stock has gained more than 100% over the past year and 1,380% over the past decade, and the evidence suggests its ascent will continue.

A holographic display of stock charts above a laptop.
Image source: Getty Images.

Bullish results

Netflix just reported its third-quarter results and sailed past expectations on every important metric. Revenue of $9.83 billion climbed 15% year over year, generating robust profit growth as earnings per share (EPS) of $5.40 soared 45%. Revenue was fueled by strong paid subscriber growth that jumped by more than 5 million, an increase of 14%. The bottom line was driven higher by an expanding operating margin that increased by an incredible 720 basis points to 29.6%.

For context, analysts' consensus estimates were calling for revenue of $9.77 billion and EPS of $5.12, accompanied by subscriber additions of 4.5 million, so Netflix beat across the board.

Perhaps more importantly, management expects its growth streak to continue. Netflix is guiding for fourth-quarter revenue of $10.1 billion, up nearly 15%, while EPS of $4.23 would more than double.

Incremental levers for growth

On the conference call to discuss the results, Netflix laid out plans to continue its impressive growth, highlighting three particularly significant opportunities.

Netflix has been dabbling in video games for some time now, but the company is beginning to see greater interest from its audience for the games based on the company's growing library of intellectual property. Management is particularly excited about the title based on Squid Game, the company's most-watched series.