TLDR
- Netflix stock fell 1% on September 23 and is down 11% for the month, bringing its year-to-date drop to 23%.
- HSBC cut Netflix from Buy to Hold and slashed its price target from $96 to $76, citing YouTube’s growing dominance.
- YouTube captured a record 14.2% share of U.S. TV viewing in July, while Netflix’s share slipped to 7.8%.
- Wells Fargo also downgraded Netflix, expecting viewing hours on its top 100 original titles to drop 21% year over year.
- Netflix is leaning harder into live sports and advertising, with its 2026 U.S. upfront ad commitments nearly doubling from last year.
Netflix stock closed down 1% on September 23, finishing at $71.36. The drop adds to a rough month for the streamer, which has fallen 11% in September and 23% since the start of the year.
The S&P 500 is up 13% over the same stretch, making Netflix’s slide stand out even more.
The pressure comes from a growing worry on Wall Street. Viewers appear to be spending more time on YouTube and less on Netflix.
HSBC made that concern official on September 22. The bank cut Netflix from Buy to Hold and dropped its price target from $96 to $76.
Analyst Mohammed Khallouf pointed to YouTube’s living room growth. The platform hit a record 14.2% share of U.S. TV viewing time in July, up 80 basis points from a year earlier.
Netflix, meanwhile, slipped to a multi-year low of 7.8%, down 100 basis points year over year. Khallouf said the decline is tied to a cooler reception for Netflix’s original content.
What’s Driving the YouTube Threat
YouTube has been paying top creators directly for exclusive content. It’s also rolled out a new “Shows” feature this summer that mimics Netflix-style episodic series.
That blurs the line between video-sharing and traditional streaming. It also raises the cost for Netflix to build a content library that can compete.
Wells Fargo echoed the caution last week with its own downgrade. Its analysts expect viewing hours from Netflix’s top 100 original titles to fall 21% from a year ago.
HSBC found something similar. Viewing hours for English-language Top 10 content dropped about 17% year over year in July and August.
Netflix’s second-quarter earnings didn’t help matters either. Sales missed estimates, third-quarter guidance came in cautious, and viewing hours only grew 2% in the first half of the year.
Where Netflix Sees Opportunity
Despite the pressure, Netflix has a counterpunch: advertising and live sports. The company says its U.S. upfront ad commitments for 2026 nearly doubled from the prior year.
It’s also expanded tools for advertisers, including automated ad buying and sharper audience targeting. Live sports remain a key piece of that plan.
Netflix added the NFL’s first regular-season game in Australia to its 2026 schedule. A Thanksgiving Eve matchup and additional holiday games are also on the way.
Those events could draw in casual viewers who skip regular Netflix shows. They also give advertisers a shot at large, simultaneous audiences that streaming rarely offers.
Valuation has shifted too. Netflix now trades at about 21 times expected earnings, down from roughly 31 times at the end of 2025.
Still, HSBC raised its content spending estimates for Netflix in 2027 and 2028 while lowering earnings-per-share forecasts for those years. More spending with no engagement bump would keep pressure on the stock.
Wall Street overall remains bullish. Analysts hold a Strong Buy consensus on NFLX based on 25 Buys, seven Holds, and one Sell over the past three months, with an average price target of $94.34, implying 32% upside from current levels.
Stop guessing and start investing with confidence. KnockoutStocks gives you the AI insights, market intelligence, and stock research you need to spot opportunities, cut through the noise, and make smarter investment decisions — all in one powerful platform.
Sign up today and get 50% OFF full access to our premium stock picks.
Simply use coupon code SPECIAL50 at checkout to claim your exclusive discount.
Get 3 Free Stock Ebooks
Discover top-performing stocks in AI, Crypto, and Technology with expert analysis.
- Top 10 AI Stocks - Leading AI companies
- Top 10 Crypto Stocks - Blockchain leaders
- Top 10 Tech Stocks - Tech giants
