Some stock picks make sense because the shares are unreasonably cheap. In other cases, you may want to grab a few shares of a skyrocketing stock while it's hot. Either way, I insist on investing in fantastic companies with promising long-term business prospects.
On that note, two stocks currently strike me as particularly great investment ideas in the media-streaming industry. They are both of the skyrocketing variety, and they deserve a closer look these days.
Netflix: Up 35% in 2025
Digital media veteran Netflix (NFLX -1.99%) has been good to its investors lately. As of May 27, the stock has gained 35% year-to-date. It's also up 530% over the past three years, dating back to the bottom of the 2021-2022 inflation panic.
The stock's total market value is up to $514 billion today. Yes, that's more than half a trillion dollars. Remember when Netflix was a standard component of the FANG or FAANG groups of market-moving stock tickers? The stock fell out of favor for a while but now it's back in style. Whatever comes after the "Magnificent Seven" club, Netflix could very well be an original member.
This is a fine example of the "skyrocketing winners" category. Skeptics have called Netflix "overvalued" and its target market "saturated" so many times, it's hard to keep track. And the company keeps proving the doubters wrong, dominating the video entertainment industry in many ways. The red DVD mailers destroyed the video rental sector. Online video streaming turned out to be a scalable and profitable business when done right, and Netflix is always a contender in the movie/TV awards season.
Netflix is the largest holding in my nest-egg portfolio. That's a natural result of a 10,019% return since the stock traded at a deep discount in the Qwikster meltdown of 2011. I'm still a Netflix buyer in 2025. This little media giant still has a lot of business growth left to do.
Spotify: Up 46% in 2025
Here's another proven winner. Digital audio giant Spotify (SPOT -4.11%) has posted 500% returns in three years and a 46% gain in 2025. Again, I'm pretty sure this is just the beginning of a long growth story.
I mean, Spotify has a long history of barely breakeven cash profits. The stock was valued almost entirely by Spotify's top-line revenue growth for many years. But that has changed recently. The sales growth is still torrential, but now it's paired with generous cash flows.
The company has grown its trailing revenues by 38% over the last two years. In the same time span, free cash flow soared from $53 million to $2.8 billion.
Spotify's recent success was no random accident, either. The company enjoys strong user engagement with its new video podcast content, supported by an effective monetization system. Premium audiobooks are another highlight, not to mention Spotify's international expansion efforts. The company's strongest sales growth in 2025 comes from premium subscribers and international markets.
Image source: Getty Images.
CEO Daniel Ek believes that Spotify should see even better results in the coming years.
"The way I see it, the long term is built one day at a time," Ek said in the Q1 2025 earnings call. "The internal tooling and AI systems we've been building over the past few years, combined with new ways of working across teams, are now enabling us to execute faster and smarter. And the compounding effect of that shift is something I believe will become even more visible in the quarters ahead."
This isn't a cheap stock, trading at 108 times trailing earnings and 47 times those growing free cash flows. I'm tempted to start a Spotify position in 2025 anyway, and kicking myself for not making that move a few years earlier.
