Warren Buffett Bought Alphabet Stock Last Year. He Might Buy This Megacap Stock Next, Says a Wall Street Expert.

Netflix is framed as potentially “Buffett-attractive” after shares fell 41% from highs, trading at ~23x earnings—the cheapest valuation in over three years. The article cites Q2 results with revenue up 13% to $12.5B and net income up 11% to $0.80/share, alongside full-year guidance for 13%–14% revenue growth. With Wall Street projecting ~20% EPS growth over the next three years and a median target price of $93 vs. ~$74 (~25% upside), the piece suggests the stock is oversold and may draw Berkshire attention.

Analysis

The real signal here is not a takeover-style catalyst; it is whether the market is finally willing to underwrite NFLX as a cash compounding moat rather than a cyclical consumer-growth name. If that framing sticks, the stock can re-rate faster than earnings because the marginal buyer shifts from momentum funds to quality/growth managers and, eventually, index-aware allocators.

Second-order damage falls on adjacent streaming/CTV names that rely on strategic scarcity rather than proven monetization. ROKU is the cleaner loser if investors decide direct platform ownership and first-party engagement matter more than aggregation, while WBD remains vulnerable to any fade in M&A optionality and a slower path to self-funded scale. In other words, NFLX strength can compress the multiple of weaker peers even if their fundamentals do not change much.

The contrarian risk is that the market is confusing a sentiment catalyst with a fundamental inflection. If subscriber growth normalizes, ad-tier monetization stalls, or content costs re-accelerate, the "cheap vs history" argument breaks quickly and the multiple can settle lower for longer. Near term this is a days-to-weeks positioning trade; the real confirmation comes over the next 1-2 quarters via ARPU, ad mix, and free cash flow margin, not Buffett speculation.

Key Decisions for Investors

• Long NFLX on pullbacks over the next 1-3 months; thesis is multiple expansion from durable FCF conversion, with upside if forward P/E moves back above 25x. Falsifier: any guide-down in revenue growth or FCF margin.
• Pair trade: long NFLX / short ROKU for 1-3 months. ROKU carries more ad-cycle beta and less pricing power; if CTV dollars stay selective, NFLX should outperform on both earnings quality and sentiment.
• If you want convexity, buy NFLX Jan-2027 75/95 call spreads after a post-news consolidation. Risk/reward is attractive if the market starts paying for terminal growth, but the trade dies if the stock stalls below the low-80s on next-quarter guidance.
• Avoid chasing WBD here; instead use it as a watchlist short only if the market starts pricing out M&A optionality. A close back above the prior high in NFLX would be the first sign the premium-quality rerating is broadening.