The Bull Case for Netflix’s (NFLX) New Growth Engine

The Bull Case for Netflix’s (NFLX) New Growth Engine Soumya Eswaran Wed, September 16, 2026 at 3:25 PM GMT+2 3 min read NFLX Weitz Investment Management , an investment management firm, released its second-quarter Q2 2026 investor letter for the "Multi Cap Equity Fund". The letter can be downloaded here . The Multi Cap Equity Fund's Institutional Class returned 7.

90% in Q2, underperforming the Bloomberg U. S. 3000 Index's 15.

71% gain. Markets rose in the quarter on hopes of de-escalating Middle East tensions and easing oil flow. Investor focus shifted back to artificial intelligence, despite component shortages like processing chips affecting profits and valuations.

Valuation-sensitive investors are selective within the AI sector, in contrast to valuation-agnostic indexes that adopt a more relaxed strategy. Additionally, reviewing the Fund's top five holdings could help identify its best picks for 2026. In its second-quarter 2026 investor letter, Weitz Multi Cap Equity Fund highlighted Netflix, Inc.

(NASDAQ: NFLX ) as a newly added postion. Netflix, Inc. (NASDAQ:NFLX) is a leading subscription-based streaming entertainment platform.

On September 15, 2026, Netflix, Inc. (NASDAQ:NFLX) closed at $77. 90 per share, reflecting a market capitalization of $324.

37 billion. Netflix, Inc. (NASDAQ:NFLX) posted a one‑month return of -2.

89%, while its shares lost 36. 59% over the past 52 weeks. Weitz Multi Cap Equity Fund stated the following regarding Netflix, Inc.

(NASDAQ:NFLX) in its Q2 2026 investor letter: "We initiated two new positions during the second quarter. Most will be familiar with global streaming giant, Netflix, Inc. (NASDAQ:NFLX).

The company made headlines as it tried to acquire Warner Bros. from Warner Bros. Discovery before ultimately walking away from a bidding war for the company.

Some investors feared its bid signaled stagnation in its streaming business. At the time of this writing, the 2026 FIFA World Cup is also captivating audiences and draining attention and engagement from Netflix's service. Despite these near-term perception headwinds, we are optimistic that Netflix's introduction of an ad-supported tier is a savvy strategy to extend its growth runway: Netflix will not only participate in the large, multi-billion-dollar global advertising market, but a lower-price ad-tier broadens its potential customer base while simultaneously enhancing the pricing power of its premium, ad free tier.

" Netflix, Inc. (NFLX): Not An Analyst Who Isn't Buying Netflix, Says Jim Cramer Netflix, Inc. (NASDAQ: NFLX ) ranks 13 on our list of 40 Most Popular Stocks Among Hedge Funds Heading Into 2026 .

According to our database, 121 hedge fund portfolios held Netflix, Inc. (NASDAQ: NFLX ) at the end of the second quarter, down from 144 in the previous quarter. While we acknowledge the potential of Netflix, Inc.

(NASDAQ:NFLX) as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock . Story Continues In another article , we discussed Netflix, Inc.

(NASDAQ:NFLX) and shared American Century Investments Focused Dynamic Growth Fund's views on the company. In addition, please check out our hedge fund investor letters Q2 2026 page for more investor letters from hedge funds and other leading investors. READ NEXT: 33 Stocks That Should Double in 3 Years and 15 Stocks That Will Make You Rich in 10 Years .

This article is originally published at Insider Monkey .