Netflix (NFLX) just popped onto the Investor's Business Daily Breakout Stocks Index alongside Magnificent Seven stocks Meta Platforms (META), Microsoft (MSFT), and Google parent Alphabet (GOOGL). Now, as Netflix stock looks to break out to an all-time high, it has set its digital crosshairs on fellow entertainment giant Disney (DIS).
As a feature story in IBD noted earlier this month, the premium streaming wars are over, and Netflix won. Now the streaming pioneer plans to spread its wings and transform into an entertainment conglomerate, looking to emerge as a next-gen Disney.
See Who Joins Netflix On The IBD Breakout Stocks Index
In terms of revenue, Disney dwarfs Netflix. Last quarter, the House Of Mouse generated $23.6 billion in sales. Netflix posted a 16% gain to $11.1 billion.
Netflix hopes to double revenue by 2030. According to The Wall Street Journal, the company aims to reach a market capitalization of $1 trillion. As of Tuesday's close, Netflix's market cap stands at just over $516 billion. But that already more than doubles Disney's $209 billion market value despite much smaller revenue for Netflix.
Netflix's bold ambition to become the Disney of the next generation includes forays into video games, live sports and other live programs, as well as in-person attractions.
"What can go wrong?," MoffettNathanson analyst Robert Fishman asked about Netflix's big plans. Positive on Netflix stock, he told IBD that these aggressive initiatives are "how the company continues to sustain the level of growth that they are at."
What Aiming To Be The Next Disney Could Mean For Netflix Stock
Rattled by Tuesday's sell-0ff on the Nasdaq, IBD Breakout Stocks Index members Netflix, Meta Platforms, Microsoft and Alphabet all retreated.
Netflix dropped below its 50-day line but held above its 21-day exponential moving average. The stock's second-stage flat base with a 1,341.15 buy point remains intact.
Although the relative strength line has retreated below its 52-week high, it has shown signs of starting to bend higher. In a sign of enduring demand, Netflix stock has seen eight quarters of rising fund ownership.
Google stock, which has earned a spot on IBD Leaderboard alongside Netflix, remains within a 197.95-207.85 buy zone after clearing a 26-week long cup with handle.
On Monday, shares of Meta gapped down as questions regarding the company's artificial intelligence and metaverse push came into focus. It fell again Tuesday, retreating to test support at its 21-day exponential moving average.
Microsoft stock failed to hold support at that benchmark line Tuesday, remains above its 50-day line.
Meanwhile, Disney remains mired below its 10-week moving average as it tries to start coming out of its slump by forming a new flat base.
Is Netflix Stock A Buy After Ad Sales Success?
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Follow Matthew Galgani on X (formerly Twitter) at @IBD_MGalgani.
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