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Netflix Just Set a Hard Low—Is This The Start of a 40% Rally? Written by Sam Quirke on January 30, 2026 
Summary - Netflix stock has stabilized after a brutal selloff, with last week’s earnings removing a major overhang.
- The stock is continuing to trade above its recent low as expectations build for a recovery rally.
- Analysts are calling for as much as 40% upside in the months ahead.
Shares of Netflix Inc (NASDAQ: NFLX) may finally be showing signs that the worst is over. Falling as much as 40% from last summer’s all-time high, Netflix was one of the worst-performing mega-cap stocks in 2025. Sentiment was washed out, growth prospects were worsening, and as a result, the company went into its Jan. 20 earnings report with very low expectations. This may have been a good thing, because Netflix shares put in a clear low immediately following its Q4 earnings report and have seemed to hold support since. Given the preceding selloff, there appears to be a meaningful shift in tone. With earnings now out of the way and lots of downside still fully priced in, the risk-reward balance is leaning firmly in favor of the bulls—let’s take a closer look at just how good it could get. As the U.S. approaches a major national milestone in 2026, some analysts are closely watching how existing executive authorities could influence economic policy and capital flows.
In a new briefing, a former government advisor outlines why a little-discussed statute is drawing renewed attention and how certain actions taken next year could have meaningful implications for markets and long-term investors. The presentation focuses on historical context, preparedness, and what to understand before events unfold. See the full briefing here The Earnings Band-Aid Has Been Ripped Off The Q4 earnings report wasn’t a blowout, but it didn’t need to be. The company topped analyst expectations on both revenue and earnings, enough to challenge the prevailing bearish narrative and prompt the bears to question their argument. With revenue up more than 17% year-over-year, free cash flow coming in strong, and a global audience approaching a billion users, the bearish position is starting to look indefensible. After months of selling, the market was positioned for further disappointment. Instead, Netflix delivered solid, resilient results that are consistent with a business that is still growing, albeit not at the breakneck pace investors were once accustomed to. Just as importantly, the earnings report removed a major source of uncertainty. For weeks, investors had been sitting on their hands waiting to see whether Netflix would stumble again. With that hurdle cleared, the stock has been given room to breathe. Price Action Is Starting to Look Good From a technical perspective, the post-earnings price action is encouraging. Having gapped down at the open the morning after the release, Netflix shares immediately bounced. While it remains to be seen if the stock will break its multi-month downtrend, that kind of behavior is a good start. This is especially relevant given the broader market backdrop. Equity markets have shifted back into risk-on mode lately, with the S&P 500 already notching fresh record highs. In that environment, deeply discounted mega-cap names with improving fundamentals and bullish price action tend to attract attention. Markets are settling into a different phase, and investors are starting to look at AI through a more practical lens. Instead of chasing hype, capital is flowing toward companies using AI to improve margins, reduce costs, and drive measurable results today. We've been reviewing a group of AI-focused businesses that benefit as adoption scales and AI becomes part of everyday operations, not just a future promise. The emphasis is on earnings discipline, real productivity gains, and business models built to compound as AI usage deepens. Access the AI stock research report and see the nine companies highlighted Analysts Are Leaning Back In With this kind of setup emerging, it’s no real surprise that the analysts are lining up to call Netflix a buy. In the week since earnings, the likes of Loop Capital, UBS Group, and Robert W. Baird have all reiterated Buy or equivalent ratings. Baird’s $120 price target is particularly noteworthy as it implies there’s upside potential of more than 40% from current levels. Wedbush has also taken a bullish stance on the stock’s prospects, pointing to the company’s advertising business as a key driver of future upside. The firm expects Netflix’s ad revenue to at least double heading into the rest of 2026, with scope for further growth beyond that as pricing power and engagement improve. When multiple firms converge around a recovery thesis like this after a prolonged selloff, it signals that sentiment is turning. The Outlook From Here Still, Netflix is not risk-free. The bears will rightly point out that significant uncertainty remains about the ongoing bidding war for Warner Bros. However, there is also a growing sense that once that deal closes, regardless of the outcome, a major overhang will be lifted. The market dislikes uncertainty almost as much as bad news, and Netflix has been trading under that cloud for months. The key for now is price action. Look for Netflix shares to continue holding above last week’s low. If they can do that in the first few weeks of February, the groundwork for a sustained recovery will be in place. Read this article online › Further Reading 
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