Streaming video is here to stay, regardless of what trend is dominating the stock market. While these stocks can ebb and flow with quite a bit of volatility, it hasn’t stopped investors from looking for the best streaming stocks to buy.
This business is not an easy one, either.
While the back-end technology for streaming video is pretty straightforward, it’s not necessarily a cheap business to get into. When you add in marketing and production costs, balancing profit vs. subscriber and revenue growth is even more difficult. Then you consider things like the strikes in Hollywood and the situation gets even more complex.
Regardless of the short-term though, most consumers likely realize that the long-term outcome for video consumption will be done via streaming. Let’s look at a few of the must-buy streaming stocks out there now.
Alphabet (GOOGL, GOOG)
However, that’s exactly what we have here. Even as investors tend to think of Alphabet as an online advertiser, internet browser, search engine, and cloud provider, it’s also one of the largest providers of video entertainment in the world.
Behind Google.com, YouTube.com is the No. 2 most popular website in the world. Further, the company’s YouTube TV is another segment in streaming. It carries tons of channels and allows for cloud-based DVR. Now, it also has the NFL’s Sunday Ticket.
“At the start of the 2023-24 season, Sunday Ticket will be available two ways: as an add-on package on YouTube TV and as a standalone a-la-carte option on YouTube Primetime Channels, which allows you to subscribe to individual streaming services and channels as well as watch movies.”
The crown of streaming belongs to Netflix (NASDAQ:NFLX). Subscription numbers, Emmy nods and other metrics aside, it’s hard to dispute what Netflix has done to the streaming video space. While many inside the industry may have shrugged off Netflix in the early goings, the company completely revolutionized the space.
The stock suffered a horrific crash in the bear market, suffering a peak-to-trough decline of more than 75%. However, the stock is now up more than 160% from those lows and is up almost 50% so far this year.
According to the company’s most recent update, Netflix had over 238 million paid subscribers, up almost 5.9 million subscribers compared to the prior quarter. As the company continues to crack down on password sharing and is pushing ad-based revenue, management is clearly on the hunt for more growth.
With the stock’s strong performance so far in 2023, investors are right to wonder if more upside could be in store for Netflix. Analysts expect modest earnings and revenue growth this year, but a notable acceleration in 2024.
Disney (NYSE:DIS) has been the down-and-out name in the space, making some investors truly question whether it’s one of the best streaming stocks to buy. However, it’s hard to sleep on this stock for the long term.
The $85 level has been strong support over the last few months and a level the stock tested just last week. When it reported earnings on Aug. 9, the market wasn’t sure what to make of the results.
In all honesty, it wasn’t a great quarter.
Non-GAAP earnings for the third quarter beat analysts’ expectations, but revenue missed consensus estimates. On a GAAP basis, Disney took a big loss in the quarter due to an impairment charge, while “Disney+ subscribers slipped again, for the third straight quarter — to 146.1M overall, well short of expectations for 154.8M.”
That said, there’s hope that we’re near some sort of turning point. If that’s the case — and with shares still down about 50% from the all-time high — there could be plenty of upside potential.
On the date of publication, Bret Kenwell did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.