The Nasdaq-100 index was recently down by as much as 23% from its all-time high, placing it in bear market territory. Global trade tensions, which were sparked by a series of tariffs President Donald Trump enacted on imported goods from the United States' major trading partners, have rattled the markets. Investors often trim their exposure to stocks during uncertain situations and flock to the safety of assets like cash instead.

But not every company is directly affected by the simmering trade war since tariffs are typically imposed on physical imports. Netflix (NFLX 5.36%), for instance, sells subscriptions to its streaming platform for access to movies and TV shows. As digital products, they've been exempt from the tariffs so far.

Moreover, Netflix operates in over 190 countries so its revenue base is extremely diversified, which will provide some insulation if any governments decide to penalize digital goods. In fact, the company released its financial results for the first quarter of 2025 on April 17, and management didn't change its full-year forecast at all despite the lingering macroeconomic uncertainty.

Netflix stock is only down 8.6% from its all-time high as of this writing, so it's doing far better than the broad market amid the recent turmoil. Here's why investors with a spare $1,000 -- money they don't need for near-term expenses -- might want to invest in Netflix right now.

Image source: Netflix.

Netflix dominates the streaming industry

Netflix had 301.6 million paying subscribers at the end of 2024. The company decided to stop reporting those numbers each quarter because it wants investors to focus on its financial metrics instead. But Netflix remains the world's largest streaming service by far. Amazon Prime is in a distant second place with an estimated 200 million subscribers, and Walt Disney rounds out the top three with 124.6 million subscribers for Disney+.

Netflix generated a record $10.5 billion in revenue during the first quarter of 2025, which was up 12.5% from the year-ago period. That growth rate represented a deceleration from the prior few quarters, but it actually exceeded management's 11% growth forecast thanks to higher-than-expected revenue across both subscriptions and advertising -- the latter of which has become a key point of focus on Wall Street.

The company introduced a new ad-supported subscription tier in late 2022 at a much cheaper price point than its regular memberships. For U.S. subscribers, it costs just $7.99 per month as of this writing, compared to $17.99 per month for the standard tier and $24.99 per month for the premium tier. However, unlike standard and premium subscribers, each ad-tier subscriber could become more valuable over time as businesses ramp up their marketing spending on the platform.

Netflix said its advertising revenue doubled in 2024, and it expects a similar result in 2025. The company rolled out its own ad-technology platform called Netflix Ads Suite in the U.S. on April 1, which will eventually allow businesses to measure the performance of their marketing campaigns with a high degree of accuracy, and also target specific audiences. These capabilities will make Netflix a more attractive destination for advertisers.

Live programming could fuel the next phase of growth

The surest way to grow advertising revenue is to keep users engaged for longer periods of time. The more time each subscriber spends on Netflix each day, the more ads they will see and the more money the company will make. Live programming is a powerful tool in that regard because sporting events like boxing and football can run for several hours at a time.

Netflix exclusively aired both NFL games live on Christmas Day in 2024, attracting about 30 million viewers each, making them the most streamed games in the sport's history. The average NFL game runs for over three hours, which is longer than what the average user spends watching Netflix each day (two hours). In other words, live sports have the potential to drive above-average engagement from subscribers, and Netflix plans to show both NFL games on Christmas Day again in 2025.

Netflix also aired the Mike Tyson vs. Jake Paul boxing match in November, which was a raging success. There was a female boxing match on the undercard between Katie Taylor and Amanda Serrano, which became the most watched women's sporting event in U.S. history. Netflix will host their rematch in July.

The company expects to spend a record $18 billion to produce and license content during 2025, which is far more than any of its competitors. Nevertheless, it remains the only pure-play streaming platform generating profits at the moment, which is a key benefit of its enormous scale. That also means Netflix is able to outbid its peers for blockbuster live events going forward.

Netflix stock isn't cheap, but its valuation might be justified

Netflix generated $6.61 in earnings per share (EPS) during the first quarter of 2025, which was a 25% increase from the year-ago period. With trailing-12-month EPS of $21.16, its stock trades at a price-to-earnings (P/E) ratio of 49.1.

That isn't cheap considering the Nasdaq-100 trades at a P/E ratio of 27.2, but Netflix's valuation might be justified considering its incredible track record and future growth potential. According to Wall Street's average estimate (provided by Yahoo! Finance), Netflix could grow its EPS to $25.31 this year before reaching $30.15 in 2026, making its P/E ratio appear far more attractive on a forward-looking basis:

Data by YCharts.

But the biggest rewards for investors will be realized long term. Netflix estimates its addressable market is worth $650 billion across streaming subscriptions, advertising, gaming, and more, and the company had only captured 6% of it at the end of 2024. Simply put, it has a long runway for continued growth.

Although Netflix stock is down just 8% from its all-time high, this could still be a great opportunity for investors to take a long-term position.