Netflix's Ad Revenue Is Expected to Surge 100% to $3 Billion: Is This the Best Stock to Buy Today With $1,000?
Netflix's Ad Revenue Is Expected to Surge 100% to $3 Billion: Is This the Best Stock to Buy Today With $1,000?
Neil Patel, The Motley FoolThu, February 26, 2026 at 4:08 PM UTC
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Key Points -
Despite only launching its ad-based subscription tier in November 2022, Netflix is seeing strong adoption that’s contributing to the top line.
With shares trading 43% off their peak, investors are presented with a better valuation.
It’s challenging to make an informed decision given the pending Warner Bros. Discovery deal.
10 stocks we like better than Netflix ›
Last year, Netflix (NASDAQ: NFLX) gave investors plenty of reasons to cheer. This business continues to operate from a position of strength. Its 325 million subscribers helped support 2025 revenue of $45.2 billion (up 16% year over year) and diluted earnings per share of $2.53 (up 28%).
The company keeps evolving, as the leadership team spots new opportunities to take advantage of. For instance, Netflix expects ad revenue to surge 100% to $3 billion in 2026. This is an entirely new money maker that didn't exist at the start of the decade.
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Does this make the streaming stock the best investment opportunity today with $1,000?
Office lobby with Netflix logo sign.
Image source: Netflix.
Netflix's top-notch management team does it again
Reed Hastings, the company's co-founder and previous CEO, was never interested in launching an ad-supported tier. Maybe he thought it would tarnish the user experience for viewers.
But in November 2022, that perspective shifted, as Netflix stepped into the advertising waters. That could've been a defensive move. In the first six months of 2022, the company lost 1.2 million members.
Now for $7.99 per month in the U.S., people have access to their favorite shows and movies in a cheaper format. This may bring in a wider audience that is probably more sensitive to price.
So far, the results are promising. Ad revenue shot up 150% in 2025 to $1.5 billion. And it's projected to double this year.
Netflix arguably has one of the best management teams in the corporate world. That's evidenced by the stock price rising more than 20,000% in the past 20 years (as of Feb. 23). It has also shown in the successful strategic pivots they've made, whether that's launching the service in foreign markets, producing original content, and more recently, getting involved in gaming and podcasts.
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How investors should approach this situation
Ever since Netflix announced the Warner Bros. Discovery deal on Dec. 5, the stock has gotten hammered. It's down 24% from that date.
I believe the market is rightfully concerned about the amount of risk and uncertainty such a massive deal, valued at an enterprise value of $82.7 billion, introduces. Netflix would take on a significant amount of debt, too. And it's impossible to know the long-term financial and strategic implications of the transaction.
Nevertheless, the stock has gotten cheaper. It trades at a price-to-earnings ratio of 30, which is 52% lower than exactly 12 months ago.
A $1,000 investment can buy 13 Netflix shares today. But that might not be the best move right now because no one knows how things will play out with the Warner Bros. Discovery deal.
Should you buy stock in Netflix right now?
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Neil Patel has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Netflix and Warner Bros. Discovery. The Motley Fool has a disclosure policy.
Source: “AOL Money”
