Netflix stock hits new high as ad revenue soars

August 22, 2024

Key points:

• Netflix shares surged to an intraday record of $711 and closed at a new high of $698.54, driven by a remarkable 150% growth in ad revenue.
• Netflix’s success in the advertising space is bolstering its valuation, which now stands at a record $300 billion.

Netflix (Symbol: NFLX) continues to assert its dominance in the streaming industry, with its stock reaching new heights, consistent with its increase in advertising revenue.

Its share price soared to $711, closing at an all-time high of $698.54, surpassing its previous peak from 2021. This comes as the company just announced a noticeable boost in ad spending, with major advertisers increasing their budgets by 150%.

Picture: NFLX stock hits new high as ad revenue soars, as observed on the VT Markets app.

We peer into analysis to see further insights into price action. Today’s chart shows a consistent uptrend, with the stock trading well above key Exponential Moving Averages (EMAs), particularly the 72-period EMA.

The MACD indicator supports this bullish sentiment, with the MACD line comfortably above the signal line, indicating ongoing positive momentum.

Traders should monitor key resistance around the $700 level, which could be a psychological barrier. If the stock breaks above this level, it may signal further upside potential. Conversely, any signs of weakening momentum or shifts in the broader market sentiment could lead to a pullback.

Netflix’s growth model

The ad-supported subscription model, which now boasts over 40 million monthly active users, is proving to be a main revenue driver for Netflix.

Despite relatively modest earnings for the most recent quarter, the company’s strong performance in the ad space has propelled its stock to a 50% year-to-date gain. Over the past five years, the valuation of Netflix has more than doubled, now sitting at a staggering $300 billion.

This growth stands in stark contrast to some of its main competitors. Disney, Warner Bros., and Paramount Global have all seen significant declines in their share prices over the same period. The ability of Netflix to capitalise on advertising while maintaining a robust subscriber base underscores its strong position in the streaming wars.

Outlook for CFD traders

The surge in Netflix stock price is appealing to trend traders looking to capitalise on the momentum.

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However, traders should be cautious of potential profit-taking that could lead to volatility in the near term.

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