2 Top Growth Stocks to Buy in 2026 That Should Be Immune to an AI Stocks Bubble Bursting: Netflix and Casey's General Stores

The author cautions against concentrated AI exposure and recommends two non‑AI growth stocks: Netflix (market cap ~$426B) and Casey's General Stores (~$21.1B). Netflix reported Q3 revenue up 17% to $11.51B, EPS +8.7% YoY, free cash flow +21% to $2.66B, and guided Q4 revenue growth of 17% with EPS up 28%; it also announced a pending ~$72B acquisition of Warner Bros. TV/film assets and HBO/HBO Max (expected to close in 12–18 months). Casey's FY Q1 2026 revenue rose 11% to $4.57B, net income and EPS +20% YoY, operates 2,895 stores, pays a 0.4% dividend, and its mix (gas, grocery, strong prepared-food margins) should leave it largely insulated from an AI-led market pullback.

Analysis

Market structure: The Netflix–Warner deal concentrates premium content & franchises (Harry Potter, Superman) under NFLX, increasing Netflix’s pricing power, global retention and FCF conversion (FCF +21% yoY to $2.66B). Winners: NFLX (scale, ad/sub leverage), content-rights owners (near-term sell-side beneficiaries); Losers: independent streamers and smaller content licensors who lose bargaining power; WBD equity holders face deal uncertainty. Casey’s (CASY) benefits from inelastic local demand for fuel/food and high-margin pizza/grocery lines (prepared foods gross ~58%), acting as a defensive consumer compounder.

Risk assessment: Key tail risks are regulatory/antitrust rejection of NFLX–WBD (probability meaningful within 12–18 months), deal financing dilution or covenant-driven capex cuts, and macro-driven subs churn in a severe recession (>5% unemployment shock). For CASY, fuel price shocks (>±10% in 90 days) and faster EV adoption (multi-year) are second-order risks. Catalysts: DOJ/FTC filings, Q4 revenue/EPS (Netflix guided +17%/+28%), and oil moves ±10% within 3 months.

Trade implications: Tactical: establish modest long exposure to NFLX (1–2% portfolio) but hedge regulatory/drawdown risk with 12–18 month 25% OTM protective puts; size CASY as a 1–2% defensive growth holding and monetize with 6–9 month covered calls at ~10% OTM to capture yield. Pair: long CASY vs short a concentrated AI-growth basket (small 0.5% hedge) to reduce beta to AI froth. Rotate 5–10% from highest-P/E AI names into these two over 2–6 weeks; trim positions on >25% rally or adverse regulatory filings.

Contrarian angles: Consensus underprices integration & financing risk for NFLX and underestimates CASY’s structural margin advantage from scratch pizza and loyalty (high LTV). The market may be under-allocating to durable FCF generators; historical parallel: media consolidation (post-2000) produced sustained winners when rights were owned. Unintended consequence: a blocked deal could produce a 20–35% NFLX drawdown; conversely, deal close could compress returns if leverage forces capex reduction.

Key Decisions for Investors

• Establish a 1.5% long position in NFLX within 2–4 weeks and simultaneously buy 12–18 month protective puts 25% OTM (hedge cost tolerable up to 2% portfolio drag) to guard against a regulatory or financing shock expected within the 12–18 month review window.
• Buy a 1.5–2% core position in CASY (ticker CASY) as defensive growth; sell 6–9 month covered calls at ~10% OTM to generate yield and set a hard trim if CASY rallies >25% from entry or if same-store sales decelerate below +3% on two consecutive quarters.
• Implement a pair trade: long CASY (1.5%) funded by a 0.5% short position in a concentrated AI/mega-cap basket (top 5 high-P/E AI-exposed names or ARKK-sized proxy) to reduce portfolio beta to AI froth; unwind if AI basket falls >20% (take profits) or CASY underperforms by >15%.
• Monitor specific catalysts over the next 30–90 days: DOJ/FTC filings on NFLX–WBD, Netflix Q4 results vs guided +17% revenue/+28% EPS, and Brent crude moves >±10% (impacts CASY fuel margins). If DOJ/FTC issues a ‘second request’ or oil spikes >$90/bbl, reduce NFLX and CASY exposure by 50% within 5 trading days.