JPMorgan says artificial intelligence is a tailwind for Netflix, not a threat. JPMorgan has resumed coverage of the streaming giant after a period of restrictions. The bank currently rates Netflix as a buy from neutral. Analyst Doug Anmuth’s new price target for Netflix is $120, which is lower than his previous estimate of $124, but suggests a 25% upside. The upgrade follows Netflix’s decision to terminate its deal to acquire Warner Bros. Discovery after an offer from Paramount Skydance was deemed superior. NFLX 1Y Mountain NFLX 1Y Charts Anmas praised Netflix’s strong underlying fundamentals. He wrote that the company remains committed to increasing profits. “We believe NFLX continues to have a healthy organic growth story due to a combination of strong content, global subscriber growth, continued pricing power and early stage/under-monetized advertising tiers,” he said. “We continue to expect strong FCF generation and expect to increase share repurchases in 2026, driven by $2.8 billion in surrender charges and the current favorable stock price.” Ammuth also sees artificial intelligence as a tailwind rather than a headwind. “AI should drive improved content discovery and personalization, improved advertising solutions and measurement, and ultimately reduced content production costs. While AI video models such as Bytedance’s Seedance 2.0 reduce barriers to content production, we believe storytelling and talent remain critical moats, ultimately better insulating NFLX from AI disruption risks compared to transactional business models,” he wrote. As another tailwind for the future, Ammuth predicts that Netflix viewing time will continue to grow. The analyst gave a nod to the company’s strong content plans for 2026, with time spent watching Netflix originals already accelerating to 9% in the second half of 2025. Anmuth also believes that U.S. price increases could occur in the middle or second half of this year. The analyst added that Netflix’s advertising revenue grew more than 150% last year and is expected to double to about $3 billion by 2026. “We believe NFLX’s size and streaming leadership position, three-year double-digit revenue growth, over 20% growth in operating income/GAAP EPS/FCF, and well-insulated subscription-based model all support a premium valuation,” the analysts wrote. Netflix stock is up 3% this year, but is down 2% over the past 12 months.
