Netflix stock jumped as much as 4.7% Thursday after Bill Ackman’s Pershing Square Capital Management disclosed a new 3.15 million-share position in the streaming company. By mid-morning, shares were still up around 3.5%, trading near $76.91.
The disclosure came through Pershing Square’s semiannual report released Wednesday evening. The position represents 4.9% of the hedge fund’s portfolio, marking a meaningful return after Pershing Square previously invested more than $1 billion in Netflix in early 2022 and exited months later with a loss exceeding $400 million.
In its shareholder letter, Pershing Square said “Netflix has since effectively won the streaming wars,” and expects the company to compound revenue at a double-digit growth rate while content costs grow more slowly than revenue, driving continued margin expansion. The fund described Netflix’s current valuation as a “substantial discount” and “highly attractive in terms of business quality and prospective earnings growth.”
Netflix’s ad-supported tier is on track to generate approximately $3 billion in revenue in 2026, with U.S. Upfront advertising commitments nearly doubling year-over-year. The company has also expanded into live sporting events to attract new viewers, building a second revenue engine beyond its traditional subscription business.
The stock has fallen roughly 42% from its peak last year and now trades at about 24 times earnings, well below its three-year average of 43. Pershing Square’s return highlights the valuation argument, while lingering concerns include insider stock sales by Netflix’s CEO and CFO in early August and slightly slower revenue growth guidance for the third quarter.
