Content may still be king, but the two players in the recent real-life game of thrones aren't doing so well. Netflix (NFLX -2.97%) initially succeeded in striking a buyout deal for Warner Bros. Discovery (WBD +0.03%) late last year, only to see Paramount Skydance (PSKY +3.06%) wrestle it away earlier this year.
Netflix is down 24% in 2026. Paramount Skydance has fallen 26%. The winner and the loser of the Warner Bros. Discovery bidding battle both lost the war? Let's size up the opportunity behind both sell-offs before deciding which one is worthy of the next $500 you have to put to work in the stock market.
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Binge investing
The case for Netflix is pretty compelling. It didn't have HBO and DC Comics parent Warner Bros. in its arsenal a year ago. It doesn't have it today, but it was on the receiving end of a $2.8 billion termination fee when Warner Bros. Discovery chose to break things off to go with the higher Paramount Skydance offer.
Netflix stock is still trading lower in 2026, and down a brutal 47% from the all-time high it notched 15 months ago. It remains the top dog in its field, with more than 300 million premium subscribers worldwide.
Business has slowed this year. Netflix began this year by posting strong fourth-quarter results in January, its strongest top-line growth in four years. It's been all downhill ever since.
- Q4 2025: 18% revenue growth
- Q1 2026: 16%
- Q2 2026: 13%
- Q3 2026: 12% (Netflix guidance)
The upside is that Netflix remains highly profitable.
NASDAQ: NFLX
Key Data Points
Mounting a bullish case for Paramount
Skydance Media was once a small company founded by David Ellison, the son of one of the richest people on the planet. Two summers ago, it struck a deal to acquire Paramount, which took 13 months to close. In February of this year, it succeeded in breaking up the deal between Netflix and Warner Bros. Discovery. It struck a $110 billion deal for Warner Bros. Discovery, which is still working its way through the thorny approval process.
Paramount Skydance should benefit from the scalability of its acquired empire once the deal is complete. Paramount was a great catch. Warner Bros. Discovery is an even bigger fish to fry (and monetize). With streaming services aggressively jacking up their prices in recent years, margins should continue to widen for remaining players.
NASDAQ: PSKY
Key Data Points
Paramount Skydance has cleared most of the hurdles to close on its deal for Warner Bros. Discovery. It's a media empire worth watching, and I believe both companies can beat the market after their year-to-date declines.
I'm still going with Netflix as the best place to put your next $500. Netflix is trading at a forward earnings multiple just shy of 20, a historical bargain for the company. Consolidation among streaming services will benefit all players. There will be more pricing elasticity and bottom-line growth. As the pioneer in this space, you don't want to bet against Netflix for long if you're short.
