When Netflix (NFLX 0.36%) gave investors its latest financial update, there weren't really any surprises. The headline metrics, revenue and diluted earnings per share, were up strong double-digit percentages year over year in the fourth quarter (ended Dec. 31). The business has continued to operate at a very high level in recent years.
But Netflix looks different from its old self. It's now collecting a sizable amount of ad revenue, which surged more than 150% to over $1.5 billion in 2025. Does this trend make Netflix the best stock to buy today with $2,000?
Image source: Netflix.
Management deserves credit for making a successful pivot
It doesn't matter what industry is being discussed. Netflix's leadership team is one of the best. With a stock price that has skyrocketed nearly 21,000% in the past two decades, it's easy to give credit where it's due. However, executives have a history of making successful strategic moves, like launching internationally and investing in original content.
The latest pivot came in November 2022, when the business finally introduced a cheaper ad-supported tier. This was a reversal of the prior intention. Reed Hastings, co-founder and previous longtime CEO, shut down the idea of displaying ads in 2020. Given that its competitors were already offering ad-based options, perhaps Netflix decided it was time to jump in the water. The decision might have been spurred by a rocky start in 2022, when Netflix's subscriber count shockingly shrank by 1.2 million in the first six months of the year.
Netflix's ad revenue doubled in 2024, and it rose more than 150% last year. "We expect that business to roughly double again in 2026 to about $3 billion," co-CEO Greg Peters said on the Q4 2025 earnings call.
Given that Netflix has long been ahead of the pack in the streaming industry, with top-notch content, a massive user base, strong engagement, and low churn, it might come as no surprise that the business has been able to grow its ad revenue so quickly. At the end of the day, this was clearly the right move. It opens Netflix up to a bigger audience, particularly price-sensitive households. And it allows the company to capture more value.
NASDAQ: NFLX
Key Data Points
Buying Netflix shares is a risky move at this point
With $2,000, investors can buy 24 shares of Netflix based on the price as of Jan. 29. On one hand, the fact that the stock is trading near a three-year low price-to-earnings ratio is compelling.
On the other hand, the pending Warner Bros. Discovery deal casts a lot of uncertainty on what the company will look like in the future. Netflix plans to now take on $42 billion in debt financing to close the transaction, which makes things very risky.
I don't think buying this streaming stock is the best decision right now.
