1 Trillion-Dollar AI Superstar That's Eating Netflix's Lunch

Owning companies that successfully disrupt an manufacture to make an wholly caller class tin effect successful immense gains for investors. This is what Netflix (NASDAQ: NFLX) has achieved. Shares person skyrocketed an unbelievable 2,580% successful the past 15 years (as of Jan. 30).

For a concern whose superior intent is to triumph attention, engagement is simply a important information constituent for investors and the enactment squad to way closely. However, Netflix has immoderate enactment to bash here.

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This trillion-dollar artificial quality (AI) superstar is eating Netflix's lunch. And its shares person outperformed the streaming stock successful the past one-, three-, and five-year periods.

In 2019, user behaviour shifted, with adults spending more clip connected their mobile devices than watching TV. Given that Meta Platforms (NASDAQ: META) has agelong optimized its contented for the mobile age, it's crushing Netflix erstwhile it comes to engagement growth, giving it a ascendant presumption successful the attraction economy.

"Instagram Reels had different beardown quarter, with ticker clip up much than 30% year-over-year successful the U.S.," CFO Susan Li said connected the fourth-quarter 2025 net call. The institution is leveraging AI capabilities to amended contented ranking. A caller absorption is to beryllium much adaptive, showing contented applicable to what a idiosyncratic is funny successful during a peculiar session.

The streaming pioneer is seeing much muted gains. "In the 2nd fractional of 2025, presumption hours accrued 2% twelvemonth implicit year," Netflix's Q4 2025 press merchandise reads.

It's worthy mentioning that Netflix households spend, connected average, astir 2 hours per time connected the platform, overmuch much than the half-hour oregon truthful that the mean idiosyncratic spends regular connected Instagram. However, it's the 30% maturation that the societal media work conscionable registered that should support Netflix executives up astatine night. The institution is being proactive, moving connected improving its mobile idiosyncratic interface to enactment maturation with vertical video formats.

Over the adjacent 5 oregon 10 years, mobile devices volition apt bid much of our attention, with TVs losing that battle. This means that Meta, with its improving AI proficiency, is successful a precise favorable presumption to thrust much engagement. And this tin marque things hard for Netflix.

Astute readers volition constituent retired that this isn't a just fight, fixed that Meta focuses connected user-generated content. But adjacent successful the streaming industry, Netflix is lagging. Over the past 3 years, Netflix's stock of TV viewing clip successful the U.S. accrued by 20%. The wide streaming marketplace (excluding Netflix), though, saw its penetration complaint emergence by a much important 92%.