Artificial intelligence presents a tailwind rather than a threat for Netflix , according to JPMorgan. JPMorgan resumed coverage of the streaming giant following a period of restriction. The bank now views Netflix as a buy, up from neutral. Analyst Doug Anmuth’s new price target on Netflix is $120 signals a gain of 25%, though it’s down from a previous forecast of $124. The upgrade follows Netflix’s decision to walk away from its deal to buy Warner Bros. Discovery after an offer from Paramount Skydance was deemed superior. NFLX 1Y mountain NFLX 1Y chart Anmuth applauded Netflix’s strong underlying fundamentals. He wrote that the company remains committed to margin expansion. “We believe NFLX remains a healthy organic growth story, driven by a combination of strong content, global subscriber growth, continued pricing power, & an early-stage/under-monetized Ad tier,” he said. “We expect continued strong FCF generation, & we look for elevated share repurchases in 2026 driven by the $2.8B termination fee & a currently opportunistic share price” Anmuth also views artificial intelligence as a tailwind, rather than a headwind. “AI should drive improved content discovery & personalization, better advertising solutions & measurement, & ultimately reduce content production costs. While AI video models such as Bytedance’s Seedance 2.0 and others reduce barriers to content creation, we believe storytelling and talent will remain critical moats, ultimately better insulating NFLX from AI disruption risk compared to transactional business models,” he wrote. As another upcoming tailwind, Anmuth predicts that Netflix’s viewing hours will continue to grow from here. Viewing hours for Netflix originals already accelerated to 9% in the second half of 2025, and the analyst nodded to the company’s strong content slate for 2026. Anmuth also sees a U.S. price increase as possible in the middle or latter half of the year. The analyst added that Netflix’s ad revenue is expected to double to around $3 billion in 2026 after growing more than 150% last year. “We believe NFLX’s scale & streaming leadership position, 3-year growth of double digits for revenue & 20%+ for operating income/GAAP EPS/FCF, & a well-insulated subscription-based model all support a premium valuation,” the analyst wrote. Shares of Netflix have added 3% this year and are down 2% over the past 12 months.
