As of the closing bell on June 6, the largest public companies in the world as measured by market capitalization were as follows:
- Microsoft: $3.5 trillion
- Nvidia: $3.4 trillion
- Apple: $3.0 trillion
- Amazon: $2.3 trillion
- Alphabet: $2.1 trillion
- Meta Platforms: $1.7 trillion
- Broadcom: $1.2 trillion
- Berkshire Hathaway: $1.1 trillion
- Taiwan Semiconductor Manufacturing: $1.1 trillion
Behind this list of trillion-dollar companies are a host of other businesses that are knocking on the door of this exclusive club. With a market capitalization of $528 billion, Netflix (NFLX 2.31%) is already halfway to a $1 trillion valuation. And with shares up 39% so far in 2025, the company looks poised to continue its monster run.
Let's explore what has made Netflix such an appealing investment during an otherwise challenging year for investors. I'll also dig into some trends fueling the company's long-term growth prospects to make the case for why Netflix could become a trillion-dollar business over the next five years.
NASDAQ: NFLX
Key Data Points
Netflix stock is on a monster run
It's not a secret that President Donald Trump's tariff policies have dampened enthusiasm in the stock market this year. Perhaps the biggest reason for that is the uncertainty that comes with tariffs.
While investors can understand at a high level how tariffs impact prices for imported and exported goods, tariff policies are more fluid. For instance, specific items or geographic regions may be excluded from certain policies. These finer details make it much more challenging to get a true sense of what is going on, and what types of businesses are most vulnerable right now.
Fortunately for Netflix, the company doesn't really need to worry much about tariffs. Netflix is a streaming business -- making revenue from subscriptions to its digital content catalog of movies and television, as well as from advertisers on the platform.
Since Netflix's core business doesn't rely on manufacturing physical products or the dynamics of imports and exports, the company is essentially insulated from the threats tariffs pose to other companies, such as retailers.
Image source: Getty Images.
Netflix could be headed to the exclusive trillion-dollar club
Earlier this year, the Wall Street Journal reported that Netflix had built a five-year forecast in which it outlined its vision to achieve a trillion-dollar valuation by 2030. Per its internal goals, Netflix's management hopes to double revenue to $80 billion, and triple operating income to roughly $33 billion over the next five years.
Doubling sales and tripling operating income in just five years looks ambitious. However, I see a number of levers that Netflix can pull in order to get there.
First, Netflix is well aware that the streaming landscape is becoming increasingly more intense. Despite its first-mover advantage, Netflix now faces competition from Walt Disney, Paramount Global, Warner Bros. Discovery, and even big tech platforms such as Amazon, Alphabet, and Apple.
To compete at a high level with these platforms, Netflix has invested heavily in developing its own original content, as well as expanding into live broadcasting -- particularly in sports. Notably, the company has struck partnerships with the National Football League (NFL) and entertainment company TKO Group Holdings.
In addition, Netflix has changed its pricing strategy in recent years in an effort to stay more competitive; it now offers a low-priced tier that features advertisements. While still nascent, Netflix's ad tier is scaling nicely. And I think as the company continues to offer more live content, larger advertising deals could be struck down the road.
Both subscription revenue and advertising sales are high-margin for Netflix. So if the company can continue unlocking customer acquisition and strong retention rates, I think it has a good path to continued revenue acceleration and widening operating profit margins for years to come.
Does the math behind the trillion-dollar goal check out?
For argument's sake, let's assume that Netflix reaches $80 billion in revenue and $33 million in operating profit by 2030. To reach $1 trillion in market cap, the company would need to trade at a price-to-sales (P/S) multiple of 12.5, or roughly 30 times its operating income.
NFLX PS Ratio data by YCharts.
As the graph above illustrates, both of the implied multiples needed to reach a $1 trillion valuation are in line with Netflix's current trends. The big question is: Can these levels be sustained?
Unless Netflix starts to show meaningful signs of deceleration or begins to lose market share to the competition, I don't see its valuation multiples contracting in a meaningful way.
Regardless of whether Netflix reaches its goal by 2030, I see it becoming a trillion-dollar stock eventually. I think that for investors, the prudent thing to do is to monitor how the company's investments in original content and advertising keep moving the needle. This should become increasingly apparent, based on its subscriber growth and profit-margin profile over time.
I think Netflix can indeed sustain a premium valuation in the long run. The caveat is that a lot needs to go right for the company over the next five years.
