Global streaming leader Netflix (NFLX) currently faces two headline risks: Elon Musk’s call for a subscription cancellation campaign and Donald Trump’s proposal to impose a 100% tariff on Hollywood films produced abroad. After reviewing Netflix’s business model, content portfolio, and the nature of these challenges, I believe the social media–driven cancellation push will have a minimal impact on the company’s earnings trajectory.
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By contrast, a 100% tariff on foreign-made content could meaningfully pressure profits. However, given the complexities of the film production ecosystem, I see significant obstacles to implementing such a policy. For this reason, I remain Bullish on Netflix, supported by its continued international expansion and the momentum of its growing advertising business.
The Woke Backlash is Unlikely to Hurt Netflix
My bullish outlook on Netflix remains intact despite the recent wave of subscription cancellation calls circulating on social media. That said, this development could weigh on the stock in the short term. For instance, Netflix shares fell 2% earlier this week after Elon Musk posted on X that he had canceled his own subscription.
In a follow-up post, he urged others to cancel as well, framing it as a matter of protecting children’s well-being. Given Musk’s vast reach and influence, his comments quickly sparked a trend in which users shared screenshots of their cancellation confirmations, fueling further momentum online. In the near term, such sentiment is likely to keep pressure on Netflix stock.
From a fundamental perspective, however, the risk appears limited. In its Q2 shareholder letter, Netflix noted that even its biggest hits represented less than 1% of total viewing time, underscoring the enormous breadth of its content library. This scale makes it unlikely that controversies around a handful of titles could drive meaningful churn.
Quality also remains a defining strength—44 Netflix titles earned Emmy nominations in Q2 alone—demonstrating the platform’s consistent output of acclaimed content. Moreover, management emphasized that Netflix continues to outperform peers in subscriber retention. Taken together, these factors suggest the current social media backlash is more noise than substance, with little bearing on the company’s long-term growth trajectory.
From Tweets to Tariffs: Netflix Faces Pressure on Two Fronts
Compared with the noise of social media backlash, Netflix faces a far more serious potential challenge from President Trump. On the same day as Musk’s outcry, Donald Trump followed suit. In a Truth Social post, he claimed that the current administration is preparing to impose a 100% tariff on movies imported into the U.S. This policy, if implemented, could directly undermine Netflix’s global content model.
The company has long followed a “local-to-local” strategy—producing shows in local languages around the world—behind some of its biggest hits such as Money Heist (Spain), Squid Game (South Korea), Counterattack (Mexico), and Exterritorial (Germany). In Q2, more than 55% of Netflix’s revenue ($6.16 billion) came from outside the U.S., and over one-third of all viewing hours were for non-English language content.
The cost implications of a 100% tariff would be staggering. Management expects content spending to exceed $16 billion this year, with at least 30% of those costs tied to international productions. A full tariff on those titles would translate into roughly $4.8 billion in additional expenses for 2025 alone.
In practice, however, enforcement would be highly complex. Film production is inherently multinational—shooting, post-production, and visual effects often span several countries, including the U.S. itself. Furthermore, intellectual property rights are frequently held through subsidiaries in jurisdictions different from where the filming occurs, muddying the definition of “country of origin.” Even determining the taxable value of a movie would be contentious, as production costs are fragmented and rarely transparent.
In short, while Musk’s social media campaign may exert temporary pressure on Netflix’s stock, a fully enforced 100% tariff on imported films would pose a structural, and potentially existential, threat to its global growth strategy.
Is Netflix Stock a good Buy?
Based on the ratings of 36 Wall Street analysts, the average Netflix stock price target is $1,400.69, which implies upside of 21% from the current market price. Notably, NFLX appears overvalued, trading at a current P/E ratio of roughly 50, compared to the sector average of 20. On a forward basis as well, the stock looks expensive with a forward P/E of 44x, more than double the sector average of 19.
Although Netflix is valued at a rich forward P/E, I believe the company still has a long runway for growth, aided by the early success of its advertising business and the massive untapped market opportunity in key global markets. The company, in my opinion, deserves to trade at premium valuation multiples, given that it has demonstrated superior subscriber growth, retention, and operating margins compared to its closest rivals.
Netflix’s Long Runway for Growth Amid Social Headwinds
Netflix is facing two external threats today, but the company seems well-positioned to thwart these threats and thrive in the long term. The social media backlash is likely to be proven a short-term adverse development, and the threat of a 100% tariff on imported movies is expected to prove extremely difficult to implement in the real world, given the complex nature of the global movie production industry. I am Bullish on Netflix as I believe the company still has a long runway to grow and return wealth to shareholders.