Netflix Growth Could Keep This ETF Elevated

Streaming content company Netflix has strong forecasts for future growth, which could help keep the Direxion Daily Dow Jones Internet Bull 3X Shares (WEBL) elevated. The fund is already up over 70% for the year, benefiting from 2023’s big tech comeback.

Netflix is one of the holdings found in WEBL, which falls in line with its specific focus on web companies. Its fund description states that it seeks daily investment results equal to 300% of the daily performance of the Dow Jones Internet Composite Index, which is provided by S&P Dow Jones Indices. It includes companies that generate at least 50% of their annual sales/revenue from the internet.

Additionally, each stock must have a minimum of three months’ trading history and a three-month average market capitalization of at least $100 million. The index itself consists of 40 stocks from two different sectors: internet commerce and internet services.

Netflix was one of the darlings during the pandemic, as consumers sought to keep themselves occupied amid social distancing measures with streaming content. Enter 2022 and the company subsequently fell victim to a big tech sell-off as the post-pandemic slump affected many companies that were a hit during the pandemic.

Can Netflix Thrive in a Post-Pandemic World?

Netflix, however, has seen its stock price recover and is seeing an upward trajectory chartwise, which could eventually see it reach the same level it was at during the pandemic. To do that, it will need to show it can fundamentally thrive in a post-pandemic world.

The company is doing that thus far and its third-quarter earnings are continuing to provide the evidence. Per a Yahoo report, Netflix “posted strong subscriber additions and earnings in the third quarter” and “also announced another round of price increases that could push some subscribers to its lower-priced ad tier.”

The byproduct of future growth could spell opportunity for WEBL. Short-term positivism could pave the way for future opportunities as well for Netflix stock.

“So the overall story is pretty positive. I was a little surprised here, especially since last quarter, we saw that miss on revenue,” said Alexandra Canal of Yahoo Finance. “But this quarter, however, we saw a beat on both the top and bottom lines. Those subscriber numbers also crushing expectations. 8.8 million net additions added versus the expected 6.2 million. I’m sure this is a combo of the price hikes along with the subscriber numbers coming in stronger than expected.”

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