Should Netflix Replace Tesla in the "Magnificent Seven"?

Group 1: Tesla Overview - Tesla's shares have increased by 1,720% over the past decade, driven by innovation and rapid growth [1] - The company's revenue surged nearly 3,000% from 2014 to 2024, attributed to its popular EV models [2] - Tesla is facing increased competition, leading to diminished pricing power and multiple price cuts to stimulate demand [3] Group 2: Challenges Facing Tesla - CEO Elon Musk's political controversies have resulted in protests and vandalism at Tesla facilities [4] - The company is sensitive to macroeconomic factors, with higher interest rates impacting sales, resulting in fewer vehicle deliveries in 2024 compared to the previous year [5] Group 3: Netflix Overview - Netflix's subscriber base reached 302 million, growing 15.9% year-over-year and 36% over the last three years [6] - The company is expanding its market presence, with less than 50% penetration into connected households, indicating future growth potential [7] - Netflix's operating margin is projected to rise from 27% to 29% by 2025, supported by a substantial revenue base of $39 billion in 2024 [8] Group 4: Competitive Position of Netflix - Netflix maintains a significant lead over competitors, with Walt Disney recently achieving profitability in its streaming segment [9] - Despite being the smallest in market cap at$392 billion among the "Magnificent Seven," Netflix's performance suggests it could replace Tesla in this elite group [10] Group 5: Investment Considerations - Netflix shares trade at a price-to-earnings ratio of 46, which is lower than Tesla's valuation of 123 times, indicating better fundamentals for Netflix [11]