Trade Tariffs: An Opportunity for Netflix and Spotify Investors

Amid escalating tariffs proposed by President Trump, Netflix and Spotify could emerge as resilient stocks. Investors may find opportunities in these platforms, given their diverse revenue streams and minimal tariff impact.

Date: 07-04-2025

AI Rating: 8

On April 2, President Trump announced tariffs aimed at increasing costs for imported goods, affecting American consumers and potentially influencing short-term market stability. Despite these disruptions, **Netflix and Spotify present intriguing investment prospects** for those eyeing the streaming sector. Digital goods remain unaffected by current tariffs, allowing Netflix and Spotify to leverage their global reach without immediate pricing pressures. Both companies report extensive diversification; Netflix, with 301.6 million subscribers, stands out as the largest streaming service worldwide. In 2024, Netflix recorded $39 billion in revenue, translating to an impressive net income of $8.7 billion, marking a 61% increase from the previous year. This position has made Netflix a prime candidate amidst trade tensions. The rapid growth of its ad-tier subscription, generating significant advertising revenue, suggests strong profitability potential moving forward. Further, analysts anticipate Netflix's earnings per share (EPS) to reach $30.18 by 2026, presenting a favorable forward P/E ratio despite current valuations. As for **Spotify**, it holds a commanding position as the largest music streaming platform, with 263 million premium subscribers as reported in 2024, leading to revenue of $17.3 billion, an 18% increase year-on-year. Furthermore, Spotify's transition into profitability confirms its sustainable business model as they navigate a challenging economic landscape. With increasing user engagement and content diversification strategies, such as AI-driven playlists and expansion into audiobooks, it seems probable that Spotify also stands to benefit in a prolonged trade conflict. The ongoing tariffs may drive more cautious investments in traditional goods, promoting digital platforms like Netflix and Spotify as attractive alternatives for risk-averse investors striving for stability during economic conflict. Given that both companies are poised for growth even amidst adverse economic conditions, these stocks showcase potential for positive returns over the next few months.

Stocks: NFLX SPOT