LOS GATOS, California, August 17, 2026, 08:17 PDT — U.S. cash markets are currently trading.
- Pershing Square, led by Bill Ackman, revealed it has taken a new stake in Netflix following an extended decline in the company’s share price.
- Netflix bought back $5.9 billion in shares during the first half, with an average implied price of $88.80.
- Revenue for the third quarter is expected to rise by 11.7%, down from the previous 13.4% increase.
Netflix, Inc. NASDAQ:NFLX appeared as a new trending search in the U.S. on Google on Monday after Bill Ackman made a move back into the stock. Pershing Square named Netflix as one of six fresh investments revealed after the company faced an extended downturn.
The wager comes at a challenging time. Netflix shares had fallen almost 17% in 2026 ahead of Thursday’s recovery. Revenue remains solid, but third-quarter growth is expected at 11.7%, marking the slowest rate since the end of 2023.
Netflix’s direct buying stands out more for investors. Over the first half, the company acquired 66.4 million shares for $5.9 billion, averaging close to $88.80 per share. With shares recently trading around $77, that’s approximately 13% below the average purchase price.
| Capital signal | Verified figure | Investor read-through |
|---|---|---|
| H1 share buybacks | $5.9 billion | Significant internal demand |
| Shares bought back | 66.4 million | Roughly 1.6% of June total |
| Implied mean price | $88.80 | Roughly 15% higher than about $77 |
| Authorized buyback left | $27.1 billion | Additional support remains possible |
| Pershing Square | Initiated stake | Signals outside confidence in value |
Buybacks deliver value only if the shares are undervalued. Netflix cut its outstanding shares in June by 1.4% compared to December. However, its implied repurchase price is currently higher than the market level. This difference increases the bar for how the company allocates cash going forward.
Ackman and Pershing’s chief investment officer Ryan Israel stated they purchased Netflix at “a substantial discount.” They maintained the company had essentially emerged as the victor of the streaming wars. Shares gained over 5% following the announcement. Investopedia
| Operating measure | Q2 2026 | Comparison or outlook | Direction |
|---|---|---|---|
| Revenue | $12.56 billion | Rises 13.4% from previous year | Climbing |
| Operating income | $4.19 billion | Increases 11% | Rising, but at a slower pace than revenue |
| Operating margin | 33.4% | 34.1% for the same period last year | Decreases by 0.7 point |
| Net income | $3.40 billion | Advances 9% | Increasing |
| Q3 revenue guide | $12.86 billion | Grows 11.7% over the year-ago quarter | Growth slows |
The business continues to generate substantial profits. Net income for the second quarter increased by 9% to $3.4 billion. The operating margin stood at 33.4%. Despite this, sales and technology expenses climbed more rapidly than revenue, reducing the margin by 0.7 percentage point.
Engagement remains the tougher metric. In the first half, members viewed over 97 billion hours, an increase of only 2%. Co-Chief Executive Greg Peters stated, “all hours are not created equal.” Beginning in 2027, Netflix will release its comprehensive engagement report once every year. TheWrap
| Growth indicator | 2025 or prior pace | 2026 figure | What matters |
|---|---|---|---|
| H1 viewing hours | Roughly 95 billion | Above 97 billion | Growth of just 2% |
| Q2 revenue growth | 16% in Q2 2025 | 13.4% | Growth slowing |
| Q3 revenue growth | Over 17% in late 2025 | 11.7% guidance | Significant deceleration |
| Advertising revenue | Roughly $1.5 billion in 2025 | Roughly $3 billion objective | Nearly double |
| Full-year operating margin | 29.5% | 31.5% objective | Profit margins supported |
Advertising may help balance weaker engagement. Netflix maintains its projection of around $3 billion in ad revenue for this year, about twice the amount anticipated for 2025. However, after the quarter, Visible Alpha’s estimates declined 7.8% as monetization trailed previous forecasts.
| Firm | Recommendation | Target | Recent action |
|---|---|---|---|
| UBS | Buy | $115 | Lowered from $130 |
| Phillip Securities | Buy | $110 | Raised from Hold |
| Bernstein SocGen | Outperform | $100 | Reduced from $110 |
| Rothschild Redburn | Buy | $93 | Lowered from $120 |
| Morgan Stanley | Overweight | $90 | Reduced from $115 |
| Rosenblatt | Neutral | $75 | Lowered from $95 |
Wall Street sentiment is still positive, though price targets have decreased. Analysts now estimate a range between $75 and $115. The average target, around $100, suggests an upside of nearly 30% from Thursday’s closing price. The variance in estimates highlights ongoing uncertainty regarding engagement and advertising.
Not all funds share Ackman’s view. Tiger Global sold its position in Netflix in the second quarter while increasing its holdings in Advanced Micro Devices NASDAQ:AMD and Space Exploration Technologies Corp. NASDAQ:SPCX. These moves highlight a shift away from established platforms and towards AI hardware and space sectors.
Upcoming evaluations will focus on third-quarter revenue, advertising monetization, and user engagement with new content. Investors are also looking for proof that share repurchases under $90 will enhance per-share value. Robust cash flow by itself will not resolve that discussion.
Risks: Subscriber numbers, viewership hours and pricing leverage might all soften simultaneously. Ad revenue growth may lag forecasts. Valuation could face strain from content spend, industry rivalry and less frequent updates on engagement.
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