Netflix (NFLX +0.12%) have been distracted of late, and it's easy to understand why. Late last year, the company agreed to acquire studio and streaming assets from Warner Bros. Discovery in a deal valued at $72 billion. While the agreement was initially welcomed by shareholders, it kicked off a contentious takeover bid and proxy battle by Paramount Skydance, and the ensuing drama continues to this day.
Even without the streaming and studio assets from Warner Bros., the streaming giant's biggest growth driver is hiding in plain sight. Does this make Netflix the best stock to buy today with $1,000?
Image source: Netflix.
It all "ads" up
Late last month, during its earnings presentation with investors, Netflix provided some details on the progress of its advertising tier -- and the results were eye-catching. Co-CEO Greg Peters noted that the company's ad revenue more than doubled in 2025, rising 150% to $1.5 billion, accounting for about 3% of Netflix's full-year revenue -- yet that could be just the beginning.
Peters said (emphasis mine), "We expect that business to roughly double again in 2026 to about $3 billion. So we're making good progress, and the opportunity ahead of us is massive." Netflix is forecasting revenue of about $51.2 billion at the midpoint of its guidance for the coming year. If the company's ad revenue doubles again in 2026 -- and there's no reason to believe it won't -- it would account for nearly 6% of Netflix's total revenue -- not bad for a side hustle.
Management is accelerating the company's ad strategy, as Netflix moves to "improve our ad capabilities," according to Peters. "We can drive more revenue. We've seen exactly the ability to do that over the last year. We've expanded demand sources. We continue to prove our speed of execution on our own adtech stack. That's more ad features, ads products, more measurement, etcetera." He went on to suggest that the focus over the next several years will be on increasing monetization and growing the company's ad inventory.
NASDAQ: NFLX
Key Data Points
The company continues to introduce new ad formats, and one of the most intriguing opportunities is interactive video ads. Netflix has a treasure trove of first-party data, allowing it to target these hybrid ads based on viewer behavior.
Netflix reportedly has more than 190 million monthly active viewers. While the company's ad-tier subscribers don't bring in as much revenue as its full-priced subscribers, Netflix is working to close that gap. The company's increasing scale, targeting data, and measurement capabilities make it a platform advertisers can't ignore.
The uncertainty caused by the will-they-or-won't-they acquisition of Warner Bros. has driven Netflix stock down by 42% -- but I believe the decline is overdone.
With $1,000, investors can get 12 shares of Netflix stock (as of this writing). Moreover, its price-to-earnings (P/E) ratio of 30 is near a three-year low, suggesting plenty of upside for investors willing to accept a little volatility.
