President Donald Trump recently expressed opposition to Netflix Inc.’s (NASDAQ:NFLX) planned takeover of Warner Bros. Discovery (NASDAQ:WBD), stirring market uncertainty. While the administration could delay or attempt to block the deal, courts might ultimately overrule any intervention. For investors, this situation raises critical questions: how should you approach Netflix stock strategy in the short and long term?
Trump’s Influence on the Warner Bros Acquisition
Trump’s public remarks have already moved markets. In December, he warned that Netflix’s takeover of Warner Bros. “could be a problem,” citing concerns about competition in the video-content sector and ideological influence. Following the announcement, NFLX shares dropped from approximately $103 on Dec. 4 to $90.32 by Jan. 13.
Historically, presidential opinions and regulatory threats have mixed effects on large acquisitions. For instance, despite Trump’s criticism of companies like Alphabet (NASDAQ:GOOGL) and Amazon (NASDAQ:AMZN) during his first term, both stocks performed strongly. While Trump’s statements may provide short-term volatility, they do not guarantee long-term disruption for Netflix.
In the short term, if the deal is blocked, Netflix stock could recover some of the losses, but there is no certainty. Investors with a horizon of one year or less may consider selling or waiting for clearer regulatory guidance before taking a position.
Netflix Stock Fundamentals
Netflix continues to dominate the online streaming market, generating significant revenue growth and robust cash flow. In Q3 2025:
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Revenue: $11.5 billion (+4% YoY)
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Operating cash flow: $8 billion (+54% YoY)
The company has positioned itself strongly in advertising, with ad revenue expected to double in 2025. Additional monetization avenues include live events and gaming content, which expand Netflix’s ecosystem beyond traditional streaming.
Despite regulatory uncertainties, NFLX stock trades at a forward P/E ratio of 37.7 as of Jan. 13, the lowest since September 2023. This historically low valuation may provide an opportunity for long-term investors seeking exposure to a company with strong growth potential.
Short-Term Netflix Stock Strategy
Short-term investors must weigh the risks of regulatory intervention against Netflix’s underlying business fundamentals. The company is not directly involved in booming sectors such as AI data centers or healthcare infrastructure, which currently drive much of market excitement. Consequently, short-term performance may only modestly outpace the broader market if the Warner Bros acquisition faces hurdles.
The short-term strategy may include:
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Selling NFLX stock to avoid volatility if relying on regulatory delays for upside
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Monitoring court rulings and government statements for clearer indications of deal feasibility
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Cautiously trading around key news events, such as legal filings or executive commentary
Long-Term Netflix Stock Strategy
For long-term, conservative investors, the Netflix stock strategy is more encouraging. The company has multiple avenues for revenue and subscriber growth:
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Ad revenue expansion – more users switching to ad-supported tiers will drive top-line growth in 2026.
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Gaming and live events – monetization of games and event content creates incremental revenue streams.
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Global subscriber growth – emerging markets, especially India, likely continue to fuel expansion even if subscriber data is no longer publicly shared.
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Recession resilience – Netflix remains an affordable entertainment option, supporting sustained engagement even during economic slowdowns.
Long-term investors may view current valuations as attractive entry points, given Netflix’s historically low P/E ratio and growth potential across advertising, gaming, and international markets.
Analyst Outlook on NFLX Stock
While short-term volatility is expected, most analysts view Netflix favorably over the long term. Current consensus opinions suggest that selling may be appropriate for short-term traders, whereas buy-and-hold strategies suit investors focused on growth and stability.
Key takeaways:
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Short-term: sell or hold until regulatory clarity emerges
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Long-term: buy, considering global growth, ad revenue, and resilient subscriber engagement
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Price metrics: P/E ratio of 37.7 suggests historically favorable valuations
Bottom Line on Netflix Stock Strategy
The Netflix stock strategy balances regulatory uncertainty with long-term growth potential. Short-term traders should be cautious about the Warner Bros. deal, while long-term value investors can benefit from Netflix’s growing revenue streams, ad monetization, and global subscriber expansion.
In conclusion, Netflix stock strategy requires a dual approach: vigilance for near-term regulatory developments and confidence in sustained, multi-year growth. Investors should tailor their strategy to their time horizon and risk tolerance, keeping a close eye on emerging content, ad revenue trends, and global subscriber growth as guiding factors for Netflix stock.
Featured Image: Megapixl
