What Happened?
A number of stocks jumped in the afternoon session after investor sentiment improved on renewed optimism that the US-China trade conflict might be nearing a resolution.
Treasury Secretary Scott Bessent reinforced this positive outlook by describing the trade war as "unsustainable," and emphasized that a potential agreement between the two economic powers "was possible." His comments signaled to markets that both sides might be motivated to seek common ground, raising expectations for reduced tariffs and more stability across markets.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks.
Among others, following stocks were impacted:
- Online Retail company Amazon (NASDAQ: AMZN) jumped 4.9%. Is now the time to buy Amazon? Access our full analysis report here, it’s free.
- Consumer Subscription company Netflix (NASDAQ: NFLX) jumped 7.6%. Is now the time to buy Netflix? Access our full analysis report here, it’s free.
- Vehicle Parts Distributors company FTAI Aviation (NASDAQ: FTAI) jumped 5.4%. Is now the time to buy FTAI Aviation? Access our full analysis report here, it’s free.
- Automobile Manufacturing company Tesla (NASDAQ: TSLA) jumped 6.1%. Is now the time to buy Tesla? Access our full analysis report here, it’s free.
Zooming In On Netflix (NFLX)
Netflix’s shares are not very volatile and have only had 5 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
The previous big move we wrote about was 7 days ago when the stock gained 5.9% on the news that The Wall Street Journal reported that the company (NFLX) set a lofty goal to reach a $1 trillion market valuation by 2030. In its annual review, Netflix laid out plans to more than double revenue from $39 billion to $80 billion, signaling aggressive growth expectations likely tied to subscriber expansion, content monetization, and international market expansion.
Additionally, the company aimed to triple its operating income from $10 billion, reflecting a focus on significantly improving profits, likely through increased operational efficiency and a more disciplined approach to content spending. These targets underscored management's ambitious vision and the confidence in the capacity to pull it off.
Netflix is up 17.4% since the beginning of the year, and at $1,040 per share, it is trading close to its 52-week high of $1,059 from February 2025. Investors who bought $1,000 worth of Netflix’s shares 5 years ago would now be looking at an investment worth $2,469.
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