Netflix’s Drift: Bullish Reset or Bearish Sequel?

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Investing in the funds involves a high degree of risk. Unlike traditional ETFs, or even other leveraged and/or inverse ETFs, these leveraged and/or inverse single-stock ETFs track the price of a single stock rather than an index, eliminating the benefits of diversification. Leveraged and inverse ETFs pursue daily leveraged investment objectives, which means they are riskier than alternatives which do not use leverage. They seek daily goals and should not be expected to track the underlying stock’s performance over periods longer than one day. They are not suitable for all investors and should be utilized only by investors who understand leverage risk and who actively manage their investments. The Funds will lose money if the underlying stock’s performance is flat, and it is possible that the Bull Fund will lose money even if the underlying stock’s performance increases, and the Bear Fund will lose money even if the underlying stock’s performance decreases, over a period longer than a single day. Investing in the Funds is not equivalent to investing directly in NFLX.

Shares of Netflix, Inc. (Ticker: NFLX) ripped higher off the April lows, but since topping out in late June, the stock has been stuck in a slow, choppy drift lower. The most recent earnings report didn’t help sentiment—and yet, management dropped a major card: a 10-for-1 stock split aimed at broadening ownership and reigniting retail interest.

The question for traders now: Does the split reset the bull case—or confirm the cracks beneath the surface?

Streaming Steady and the Content Boom

Netflix still sits atop the streaming throne—premium content, global scale, and a platform that dominates wherever screens exist. Its Emmy-winning originals, accelerating ad-tier, emerging gaming business, and push into live events (NFL Christmas Day, WWE Raw) highlight how aggressively it’s expanding beyond traditional streaming.

Its moat remains massive:

• 280M+ paying subscribers

• A decade-long advantage in personalization algorithms

• Global distribution across nearly every connected TV and mobile device

• Fast-growing segments: gaming, live sports, and hybrid bundles

Recent wins—including ad-tier growth of more than 40% YoY, gaming momentum via the GTA trilogy, and deeper distribution deals with Comcast, T-Mobile, and major smart-TV makers—underscore Netflix’s continued strategic leverage. Margins above 65% and ad revenue up 150% YoY suggest the business is far from slowing structurally.

Traders expecting a rebound or split-driven retail demand may consider Direxion’s Daily NFLX Bull 2X Shares (Ticker: NFXL), which seeks daily investment results, before fees and expenses, of 200% of the performance of Netflix, Inc. common stock (Ticker: NFLX).

Below is a daily chart of NFLX as of November 13, 2025.

Source: TradingView.com

Candlestick charts display the high and low (the stick) and the open and close price (the body) of a security for a specific period. If the body is filled, it means the close was lower than the open. If the body is empty, it means the close was higher than the open.

The performance data quoted represents past performance. Past performance does not guarantee future results.

Market Saturation and Consumer Slowdown?

But even streaming royalty can lose the spotlight. Netflix’s leadership is facing pressure on multiple fronts:

• Subscriber growth is slowing in mature markets

• Competitors like Disney+, Prime Video, Peacock, and free ad-supported apps (Tubi, Pluto) are gaining traction

• Consumer streaming fatigue is rising as subscription costs stack up

• Some households are reverting to… cable

• Reports of higher churn in lower-income segments are emerging

• Regulatory noise around password-sharing enforcement may cause turbulence

While Netflix remains dominant, the near-term trend is wobbling.

The next earnings report on January 20 (date is subject to change) is a potential volatility spark. Traders will focus on:

• Paid net additions vs. the +5M estimate

• Ad-tier ARPU growth

• Live-sports roadmap details

• International expansion momentum

• Any tempering of the margin outlook

A miss, weak guide, or softer ad momentum could accelerate the current drift lower.

In that case, Direxion’s Daily NFLX Bear 1X Shares (Ticker: NFXS) offers a way to position tactically for further downside. NFXS seeks daily investment results, before fees and expenses, of 100% of the inverse performance in common shares of Netflix, Inc. (Ticker: NFLX).

Bottom Line

Netflix remains the undisputed streaming king—with optionality in ads, sports, gaming, and global content. But between saturation, rising competition, consumer fatigue, and a stock split that might not solve the deeper slowdown concerns, traders have a setup that can break both ways.

*Definitions and Index Descriptions

An investor should carefully consider a Fund’s investment objective, risks, charges, and expenses before investing. A Fund’s prospectus and summary prospectus contain this and other information about the Direxion Shares. To obtain a Fund’s prospectus and summary prospectus call 866-476-7523 or visit our website at direxion.com. A Fund’s prospectus and summary prospectus should be read carefully before investing.

Direxion Shares Risks – An investment in a Fund involves risk, including the possible loss of principal. Each Fund is non-diversified and includes risks associated with a Fund concentrating its investments in a particular security, industry, sector, or geographic region which can result in increased volatility. A Fund’s investments in derivatives such as futures contracts and swaps may pose risks in addition to, and greater than, those associated with directly investing in securities or other investments, including imperfect correlations with underlying investments or the Fund’s other portfolio holdings, higher price volatility and lack of availability. As a result, the value of an investment in a Fund may change quickly and without warning.

Leverage Risk – The Bull Fund obtains investment exposure in excess of its net assets by utilizing leverage and may lose more money in market conditions that are adverse to its investment objective than a fund that does not utilize leverage. A total loss may occur in a single day. Leverage will also have the effect of magnifying any differences in the Fund’s correlation with NFLX and may increase the volatility of the Bull Fund.

Daily Correlation Risk – A number of factors may affect the Bull Fund’s ability to achieve a high degree of correlation with NFLX and therefore achieve its daily leveraged investment objective. The Bull Fund’s exposure to NFLX is impacted by NFLX’s movement. Because of this, it is unlikely that the Bull Fund will be perfectly exposed to NFLX at the end of each day. The possibility of the Bull Fund being materially over- or under-exposed to NFLX increases on days when NFLX is volatile near the close of the trading day.

Daily Inverse Correlation Risk – A number of factors may affect the Bear Fund’s ability to achieve a high degree of inverse correlation with NFLX and therefore achieve its daily inverse investment objective. The Bear Fund’s exposure to NFLX is impacted by NFLX’s movement. Because of this, it is unlikely that the Bear Fund will be perfectly exposed to NFLX at the end of each day. The possibility of the Bear Fund being materially over- or under-exposed to NFLX increases on days when NFLX is volatile near the close of the trading day.

Netflix, Inc. Investing Risk – Netflix, Inc. faces risks related to maintaining and expanding membership for its streaming services; competition in the entertainment video market; unforeseen costs or liability in connection with content that is acquired, produced, licensed and/or distributed through its service, among other risks.

Entertainment Industry Risk — Companies in the entertainment industry may be impacted by the high costs of research and development of new content and services in an effort to stay relevant in a highly competitive industry, and entertainment products may face a risk of rapid obsolescence.

Consumer Services Sector Risk — The communication services sector may be dominated by a small number of companies which may lead to additional volatility in the sector. Communication services companies are particularly vulnerable to the potential obsolescence of products and services due to technological advances and the innovation of competitors.

Additional risks of each Fund include Effects of Compounding and Market Volatility Risk, Derivatives Risk, Counterparty Risk, Rebalancing Risk, Intra-Day Investment Risk, Industry Concentration Risk, Market Risk, Indirect Investment Risk, and Cash Transaction Risk. Additionally, for the Direxion Daily NFLX Bear 1X Shares, Shorting or Inverse Risk. Please see the summary and full prospectuses for a more complete description of these and other risks of a Fund.

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