After aligning with optimistic views prior to Netflix’s latest earnings report, CNBC’s Jim Cramer expressed increased confidence in the company’s future. He commended Netflix’s management for their positive outlook and commentary regarding content.
Cramer noted that recent earnings addressed concerns about Netflix’s capacity to generate sufficient growth to justify its stock price-to-earnings ratio. He remarked that, in the short term, the skeptics might retreat, but emphasized the importance of remembering these positives when criticisms eventually reemerge against this leading company.
Netflix exceeded Wall Street’s expectations for earnings, revenue, and subscriber growth, which led to an 11% rise in its stock price by Friday morning, maintaining those gains through the market close.
Cramer was particularly encouraged by the company’s guidance for the current quarter and 2025, as it expects to maintain double-digit revenue growth, despite some investor concerns about sustainability. He appreciated co-CEO Ted Sarandos’ remarks about Netflix’s extensive library and user engagement, highlighting that members watch an average of two hours daily. Cramer took note of Sarandos’ emphasis on enhancing the value of Netflix’s offerings rather than bundling with other services.
Cramer’s optimism about Netflix’s capacity to expand its ad-supported tier was buoyed by popular content offerings and upcoming events, including two NFL games on Christmas Day. He also viewed positively Sarandos’ comments on the business impact of artificial intelligence.
Cramer concluded that while Netflix is not solely an AI-focused company, its extensive library, evident consumer interest in the ad-tier model, and ability to leverage artificial intelligence present multiple opportunities for future financial growth.
