The advertising revenue of Netflix grew 2.5x in 2025 and is expected to double to make Netflix a potentially interesting investment with an allocation of $1000 at the current moment.
As of February 25, 2026, shares are trading at around $78.09 representing a loss of 2.7 % of the highs since the stock market hit the highs of the stock market but the price to earnings ratio is almost down to three years low.
The Expansion Of Ad-Tiers Stimulates Development
The industry leader recorded 325 million paid subscribers by the end of 2025. Netflix’s revenue increased by 18% to approximately $12.1 billion in the fourth quarter of 2025, while its operating income increased by about 30% to almost $3.0 billion, increasing its operating margin to about 24.5%.
In the earnings announcement, Co-CEO Greg Peters stated expectations of the advertising segment: we expect that this business will approximately again together in 2026 to an approximate of $3 billion.
Peters said,
We expect that business to roughly double again in 2026 to about $3 billion. So we’re making good progress, and the opportunity ahead of us is massive.
The Development of Acquisitions Causes Distraction
Shareholders are focusing on the acquisition of the old Paramount by Netflix, a new company of $72 billion under the hold of Warner Therapy, studios, and HBO Max; the purchase was concluded at the end of 2025 but was affected by a rival bid to purchase the company.
A full cash-based adjustment will aim to complete the purchase by the end of Q3 in 2026, to save the company billions of dollars annually and improve blockbuster content. However, this dynamism clouds advertising as the main engine of growth, which is set to make up 6 % of the $51.2 billion revenues that are likely to be seen in 2026.
Investment Strategic Consideration
Netflix subscribers viewed 96 billion hours of content in the second half of 2025, up 2% year over year, and an investment of $1,000 would only secure this investor roughly 12 shares of the company that controls the service.
Prior to the split, Netflix was worth about $1,323 in June 2025, but it is now worth $769, a staggering 42% drop. The decline comes after growing skepticism surrounding its $82.7 billion proposed acquisition of Warner Bros. Discovery, which must first pass a number of obstacles before receiving any sort of approval.
Advertising is scalable, along with synergies of the content created by Warner, which places Netflix in the position of market dominance, meaning that the present share price drop is a valuation opportunity to long-term investors.