What happened

Shares of Netflix (NASDAQ:NFLX) closed 6.2% lower on Wednesday, hamstrung by a reputable analyst firm's report on a competing service offering from mighty Apple (NASDAQ:AAPL).

So what

In a research report on Apple's video-service plans, Morgan Stanley analyst Katy Huberty estimated that an as-yet unannounced Apple Video service could collect revenues in the neighborhood of $500 million next year and $4.4 billion in 2025. The report hardly moved Cupertino's trillion-dollar market cap, but Netflix investors ducked for cover.

A young couple shoveling popcorn into their mouths, staring wide-eyed at the TV screen.

Another new video platform? Fire up the popcorn! Image source: Getty Images.

Now what

For comparative purposes, Netflix's top-line sales have reached nearly $4 billion per quarter. Huberty is not arguing that Apple is about to kill Netflix, but her report does outline a rapidly growing global market for streaming video services.

There's plenty of room for several successful players in that expanding space, and I don't think Netflix's management is sweating bullets over Huberty's report. I see no reason for Netflix investors to throw in the towel, either. Today's share price drop is a classic overreaction to a well-reasoned market analysis that doesn't really change anything.