Billionaire investor Bill Ackman is betting on NFLX stock again, years after his firm dumped its Netflix shares at a loss exceeding $400 million. According to Yahoo Finance, Ackman's publicly traded investment vehicle, Pershing Square Holdings Ltd., has acquired a fresh stake in Netflix Inc. through the Pershing Square investment firm, arguing that the streaming giant has now decisively pulled ahead of its rivals.
"Netflix has since effectively won the streaming wars," Pershing Square said in its latest Investment Manager's Report, as cited by Yahoo Finance.
The renewed bet marks the second time Ackman has invested in Netflix, and the circumstances could hardly be more different from his first attempt. In early 2022, Pershing Square built a position in the company just as Netflix reported its first subscriber loss in a decade, shedding roughly 200,000 subscribers in the first quarter. The suspension of service in Russia following the invasion of Ukraine alone cost Netflix about 700,000 members. NFLX shares plunged 35 percent on the news, and Ackman sold Pershing Square's 3.1 million shares for a loss topping $400 million after holding the position for just three months.
At the time, Ackman said he had "lost confidence" in his ability "to predict the company's future prospects with a sufficient degree of certainty," even as he acknowledged that Netflix's plans to introduce advertising and crack down on password sharing made strategic sense. Because Pershing Square typically concentrates its portfolio in roughly a dozen holdings and demands a high degree of predictability from each, the near-term uncertainty proved too much for the firm to stomach.
That decision looks costly in hindsight. NFLX stock has climbed nearly 650 percent since Pershing Square's 2022 exit, propelled by a crackdown on password sharing, the rollout of a cheaper ad-supported subscription tier, and a broader push into live programming and sports.
A Different Netflix, And A Different Entry Point
Pershing Square's latest rationale centers on Netflix's scale. The firm noted that Netflix now counts more than 325 million subscribers, nearly double the combined subscriber base of its two closest competitors, Disney+ from Walt Disney Co. and HBO Max from Warner Bros. Discovery. The firm also pointed to Netflix's spending discipline, noting that cash content spend has grown at just a 2 percent annual rate since 2021 while the company converts approximately 90 percent of earnings into free cash flow, much of which has been funneled into share buybacks.
Advertising has become a meaningful growth lever as well. Pershing Square said Netflix's ad business has scaled rapidly toward $3 billion in revenue, with the lower-priced, ad-supported tier expanding the company's reach among price-conscious consumers, particularly in international markets.
Importantly for Ackman's firm, the timing of the new stake follows a sharp pullback in NFLX stock. Pershing Square said its opportunity arose after shares fell about 50 percent from their June 2025 high of $134, a de-rating from more than 40 times forward earnings to roughly 21 times. The firm traced the decline to prolonged uncertainty surrounding Netflix's bid for Warner Bros. Discovery, a deal Netflix ultimately lost in February 2026 but which still yielded the company a $2.8 billion termination fee, according to Yahoo Finance. Investor attention has since shifted toward plateauing engagement trends and longer-term worries about how AI-generated video could reshape content creation.
Pershing Square pushed back on both concerns. The firm argued that short-form video is primarily taking market share from linear television and weaker streaming rivals rather than from Netflix itself, and that fears about artificial intelligence disrupting the business are overstated, since producing high-quality, long-form content remains expensive and difficult to replicate. Netflix's scale, along with its AI-powered recommendation systems and ad-targeting capabilities, could instead reinforce its competitive position, the firm said.
"Looking forward, we expect Netflix to compound revenue at a double-digit growth rate, with content costs growing more slowly than revenue driving continued margin expansion," Pershing Square said. "Combined with a robust buyback program, we estimate earnings should compound at close to 20% annually." The firm added that it views Netflix's current valuation multiple as a substantial discount for a business with what it called a dominant market position and strong growth profile.
Mixed Signals From Recent Earnings
Netflix's own recent results paint a more mixed near-term picture than Pershing Square's bullish framing might suggest. In July, the company reported second-quarter revenue of $12.56 billion, slightly below analyst estimates, though earnings per share of 80 cents beat Wall Street expectations. Every region posted revenue growth, led by a 21 percent increase in Latin America and 16 percent growth in Asia Pacific. Netflix also disclosed that live programming, while expected to make up only about 5 percent of its content budget, has driven six of its ten biggest new-member sign-up days over the past five years.
Looking ahead to the third quarter, Netflix forecast revenue of $12.86 billion and earnings per share of 82 cents, both below Wall Street expectations, and the company narrowed its full-year revenue guidance to a range of $51 billion to $51.4 billion. Management reiterated that Netflix remains open to selective mergers and acquisitions but will maintain a high bar for larger deals after walking away from its pursuit of Warner Bros. Discovery.
Despite Pershing Square's optimism, NFLX stock remains down more than 20 percent year-to-date, a steeper decline than those posted by Disney and Warner Bros. Discovery shares over the same period. Sentiment among retail investors has also turned cautious: on the social platform Stocktwits, retail sentiment toward NFLX stock was described as "bearish" at the time Yahoo Finance's report was compiled, even as some individual traders pointed to Ackman's renewed investment as a potential catalyst for the shares.
The divergence between Wall Street's near-term caution and Pershing Square's long-term conviction underscores the central question now surrounding Netflix: whether investors should focus on decelerating engagement and guidance that missed expectations, or on the company's dominant subscriber base, disciplined spending, and buyback-fueled earnings growth that Ackman's firm is once again willing to bet on.
