Netflix Inc. (NFLX) is having a moment—and not the good kind. The streaming giant's stock has slumped harder since reporting third-quarter earnings, falling 11% while the S&P 500 dipped just 1%. Investors are suddenly very interested in asking uncomfortable questions about media dealmaking, competition, and whether Netflix's remarkable growth story has another act.

JPMorgan analyst Doug Anmuth maintained a Neutral rating on the stock but trimmed his price target from $127.50 to $124.00, acknowledging the growing anxiety around high-multiple tech stocks and Netflix's strategic direction.

The M&A Question Nobody Asked For

Here's the thing: Netflix has never done a major acquisition. It builds stuff instead of buying it. That's been the playbook forever. But now, with media companies scrambling to consolidate and everyone wondering if Netflix needs to play offense, investors keep pressing management on whether they're eyeing any big deals.

Anmuth reminded nervous shareholders that any M&A Netflix might consider would need to expand its opportunities, strengthen its intellectual property, and speed up execution—not create distractions or invite regulatory headaches. More importantly, Netflix already owns most of what it streams. Originals now make up roughly 63% of its library, and no single title accounts for more than 1% of total viewing. Even if rivals merge and licensing gets trickier, Netflix has built a fortress of proprietary content.

The Advertising Business Is Actually Working

Three years into its advertising experiment, Netflix is showing real progress. The platform now counts 190 million monthly active ad viewers—a higher bar than the 170 million "watcher" metric it cited back in May. That's not just scale, it's serious engagement.

Netflix has built out the infrastructure too: thousands of advertisers, support from major demand-side platforms, and improving measurement capabilities. The company expects ad revenue to more than double in 2025, and Anmuth projects another 46% jump to $4.3 billion in 2026 as Netflix shifts toward programmatic sales. Sure, the ad tier still dilutes average revenue per member for now, but monetization should improve over time as the business matures.

Growth Looks Steady, Even If Investors Are Jittery

Netflix will issue its first formal 2026 revenue guidance in January, and Anmuth expects the company to project 11% to 13% revenue growth—similar to how it entered 2025. He's modeling normalized expense growth of about 10% in 2025 and 9% in 2026, which should support double-digit revenue gains while maintaining operating discipline.

For 2026, Anmuth estimates revenue hitting $50 billion, with strong margin expansion and free cash flow reaching $12.3 billion. On the content side, Netflix continues gaining viewing share in the U.S. and major international markets. Recent hits and a stacked second-half slate are driving faster view-hour growth, and momentum should build in 2026 with major franchise releases and expanded live sports programming.

For the fourth quarter, Anmuth projected revenue of $11.96 billion and adjusted earnings per share of $0.54.

Despite the recent pullback, the analyst sees Netflix positioned for durable growth, rising advertising scale, and expanding shareholder returns. The stock was up 2.10% at $112.60 at the time of publication on Tuesday.