Can This Relentless Stock Join Taiwan Semiconductor and Berkshire Hathaway In the $1 Trillion Club?
Investing
Since Apple (NASDAQ:AAPL) became the first U.S. company to surpass a $1 trillion market valuation on August 4, 2018, the prevalence of trillion-dollar stocks has marked a new era in global finance, reflecting the dominance of technology and innovation.
This milestone, driven by Apple’s iPhone ecosystem and brand loyalty, opened the floodgates for others. Microsoft (NASDAQ:MSFT), Amazon (NASDAQ:AMZN), and Alphabet (NASDAQ:GOOG)(NASDAQ:GOOGL) quickly joining the elite club by 2019, followed by Saudi Aramco, Nvidia (NASDAQ:NVDA), Tesla (NASDAQ:TSLA), and Meta Platforms (NASDAQ:META) in subsequent years.
As of today, the trillion-dollar club boasts 10 members, a significant increase from the single entrant just seven years ago, fueled by AI breakthroughs, cloud computing, and e-commerce booms. This rapid expansion highlights a shift toward mega-cap companies, where market caps reflect not just current earnings but future growth potential in transformative sectors.
However, the journey to trillion-dollar status is rare, requiring sustained innovation, market leadership, and investor confidence. While only a handful have achieved this, companies like Netflix (NASDAQ:NFLX), currently valued at $516 billion, hint at the possibility of joining this exclusive group with the right trajectory.
Netflix’s Relentless Pursuit of Growth
Netflix has redefined entertainment since launching its streaming service in 2007, evolving from a DVD rental pioneer to a global powerhouse with 301.6 million subscribers across 190 countries by 2025. This relentless pursuit of growth, marked by a 101,000% increase in NFLX stock since its IPO, stems from its first-mover advantage, offering a convenient, content-rich alternative to cable TV.
Revenue has soared from $4.4 billion in 2013 to $39 billion in 2024, a 786% jump, driven by original content like Stranger Things and strategic expansions into markets like Europe, the Middle East, and Africa (EMEA), where revenue grew 15% year-over-year in Q1 2025.
The introduction of an ad-supported tier is helping Netflix’s exponential growth. It boasts reaching 94 million users now, up 34% since November and 135% higher than a year ago. Its ventures into live sports, such as through NFL partnerships, signal a diversification that could sustain this momentum.
Despite a market cap of $516 billion, far below the trillion-dollar threshold, Netflix’s trajectory suggests potential to join the elite club.
Roadblocks to Riches
The company’s growth isn’t without hurdles. Analysts note that as Netflix matures, its double-digit revenue growth — projected at 15.4% for Q2 2025 — may decelerate, especially in saturated U.S. and Canadian markets, which only grew 9% in the first quarter.
Competition from Disney (NYSE:DIS), Amazon Prime, and others could also threaten its dominance, while its price-to-earnings ratio of 57 reflects a premium valuation that could contract as growth slows.
Management also stopped reporting subscriber counts this year. While the company says it wants to focus on financial and user engagement metrics, some interpret this as a sign that growth is slowing. Wedbush Securities analyst Alicia Reese says it can allow Netflix to “obscure subscriber churn.”
Yet, management’s ambitious goal to double revenue to $80 billion by 2030, paired with tripling operating income to $33 billion, offers a roadmap. With a current price-to-sales ratio of almost 13, a 13% annual revenue increase could push its market cap to $1 trillion by 2031, should its growth remain constant.
Free cash flow, reaching $6.9 billion in 2024 and expected to hit $8 billion in 2025, provides flexibility for content investment or share repurchases, bolstering NFLX stock’s long-term value.
The Road to $1 Trillion
To reach a $1 trillion valuation, Netflix must overcome significant challenges. It needs to maintain or expand its subscriber base, currently at 500 million potential households (excluding China), requiring deeper penetration in Asia-Pacific (23% growth in Q1 2025) and EMEA. Sustaining a 13% revenue growth rate demands successful scaling of its ad tier and live content, like potential NBA deals, to offset content cost pressures.
The stock, trading at around $1,212 per share in June 2025, would need to hit approximately $2,288 per share (based on 437 million diluted shares outstanding), implying an 89% increase from its current level. This requires not just operational success but also a stable or expanding valuation multiple, likely around 12 to 15 times sales or 25 to 30 times earnings by 2035.
Key Takeaway
It is certainly feasible that Netflix could join the trillion-dollar club within the next decade, though definitely not guaranteed due to market saturation risks and even new ways to consume entertainment being developed. Yet a disciplined focus on profitability and new revenue channels could elevate the streamer to the $1 trillion valuation threshold, cementing its legacy as a tech titan.
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