Earnings Preview | Netflix receives bullish sentiment from Wall Street ahead of earnings, can the tech giants' earnings season start with a "bang"?

According to Zhitong Finance APP, streaming giant Netflix (NFLX.US) will announce its first-quarter earnings after the U.S. stock market closes on Thursday. Wall Street analysts generally believe that this streaming giant is expected to demonstrate strong performance resilience amid macroeconomic uncertainty. With the release of Netflix's financial report, it signifies the beginning of the earnings season for U.S. tech giants. As the U.S. stock market and other global stock markets continue to be hit by the "tariff pressure" from the Trump administration, the actual performance strength of tech giants, which hold significant weight in the Nasdaq Composite Index and the S&P 500 Index, is crucial for these two indices to enter a rebound trajectory.

The quarterly financial reports of numerous U.S. companies will be the key data that global investors focus on this week. Goldman Sachs (GS.US), Bank of America (BAC.US), Citigroup (C.US), Johnson & Johnson (JNJ.US), Taiwan Semiconductor Manufacturing Company (TSM.US), and Netflix (NFLX.US) are all expected to release their latest earnings reports this week. Among them, the financial data and management performance outlook of the latter two are particularly critical.

The earnings report and performance outlook from Taiwan Semiconductor Manufacturing Company are expected to significantly repair the "AI investment logic" in the stock market, thereby driving AI-related tech stocks, especially leaders in AI infrastructure like NVIDIA and Dell, to start a new round of gains. If Netflix's actual performance data and management performance outlook are much stronger than market expectations, it would mean a "strong start" for the earnings season of U.S. tech giants, likely driving the Nasdaq and S&P 500 indices, which have been sluggish since March, to continue rebounding.

Wall Street financial giant JP Morgan recently stated in a client report that Netflix is one of the "most resilient" companies within its coverage, primarily due to its strong streaming subscription user base (average daily viewing time of 2 hours). JP Morgan has given Netflix stock an "overweight" rating with a target price of up to $1,025 within 12 months. As of last Friday's market close, Netflix's stock price was $918.290.

As emphasized by JP Morgan in its analysis report on the internet industry, Netflix has shown relative defensiveness under potential macroenvironmental challenges, thanks to its high user engagement (average daily viewing of 2 hours per user), high entertainment value service pricing, and low-priced ad-supported version (priced at $7.99 per month in the U.S. market), making Netflix's streaming subscription service more widely accessible.

With Netflix no longer disclosing the number of subscription users, market attention should shift to the revenue sales expectations for 2025. JP Morgan believes that the market expectations are reasonable ahead of the first-quarter earnings report in April. The firm expects Netflix's sales in 2025 to achieve strong growth, with the U.S. and U.K. markets potentially driving annual sales growth of over 28%, and significantly increasing average revenue per user (ARM) through recent price adjustments.

Morgan Stanley has also listed Netflix as a "preferred stock," expecting the tech giant to demonstrate relative resilience amid a weak global macroeconomic backdrop. The firm's analyst team believes that the significant stock price correction triggered by Trump's tariff announcement on April 2 presents a "good buying opportunity." Morgan Stanley reiterated its "outperform" rating for Netflix, setting a target price of $1,150 within 12 monthsMorgan Stanley pointed out that Netflix shows good momentum in its core subscription business, with members watching nearly two hours of programming per person per day on average. The firm added that this momentum would reduce the company's overall risk relative to the market, even as the advertising market struggles amid escalating trade tensions.

Among the 18 Wall Street analysts covering Netflix tracked by Visible Alpha, 14 rated it as "Buy" or equivalent, while the rest rated it as "Hold." The consensus target price is approximately $1,097, representing nearly a 20% upside from last Friday's closing price.

In terms of market performance expectations, Wall Street analysts generally anticipate Netflix's overall sales in the first quarter to be around $10.5 billion (implying a year-on-year increase of +12%), with a net profit of approximately $2.48 billion (or $5.69 per share), up from $2.33 billion (or $5.28 per share) in the same period last year. As of last Friday's close, Netflix's stock price was $918.29, having risen nearly 50% over the past 12 months.

Bullish Wall Street analysts believe that Netflix has many ways to drive performance growth. The most significant of these is raising subscription prices, especially for the standard tier. Since the introduction of the ad-supported subscription model, Netflix has not raised the price of the standard subscription tier for over two years. More importantly, as the exclusive IP content library continues to expand and the platform's user base grows, the expectation of price increases makes investors optimistic about Netflix's future revenue growth. The global audience "binge-watching" effect brought by popular IPs like "Squid Game" is expected to drive Netflix to raise subscription prices, achieving "growth in both volume and price"—this is also one of the key expectations driving Netflix's long-term stock price increase.

Thomas Martin, a senior portfolio manager at Globalt Investments, stated that Netflix has fully demonstrated that it has the most loyal subscriber base in the world, willing to pay more for its streaming service, thanks to numerous high-quality series like "Stranger Things." "They have a lot of room to raise prices on some subscription tiers without likely losing customers," Martin said in an interview