Streaming company Netflix (NFLX) has started using generative AI (GenAI) in the production of its movies and shows, which is a significant change in how content is made. Indeed, during the company’s latest earnings call, co-CEO Ted Sarandos revealed that Netflix included what it believes to be “the very first GenAI final footage to appear on screen” in the Argentine series El Atonata. In that project, Netflix’s internal production team worked with the show’s creators to use AI for a complex scene that showed a building collapse.
Elevate Your Investing Strategy:
- Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence.
- Make smarter investment decisions with TipRanks' Smart Investor Picks, delivered to your inbox every week.
According to Sarandos, the AI-generated scene was completed ten times faster and at a lower cost than traditional visual effects tools. Interestingly, Sarandos emphasized that AI isn’t just a cost-cutting measure but a creative tool that gives filmmakers more power. He pointed out that AI-powered tools are already helping creators with tasks like pre-visualization, shot planning, and visual effects. These tools are also allowing smaller productions to access high-end effects, such as de-aging, that were once only available to big-budget films.
In addition, Netflix is using GenAI in other areas of its operations, including its advertising business. Indeed, Netflix plans to launch interactive ads in the second half of 2025. Furthermore, earlier this year, it introduced an AI-powered search feature. As a result, the company hopes that these new tools will allow it to continue performing well financially. In fact, the company reported second-quarter revenue of $11.08 billion, a 16% increase from the year before, with $3.13 billion in profit. Viewership also remained strong, with users watching over 95 billion hours of content in the first half of 2025.
Is NFLX Stock a Good Buy?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on NFLX stock based on 27 Buys, 11 Holds, and zero Sells assigned in the past three months, as indicated by the graphic below. Furthermore, the average NFLX price target of $1,360.28 per share implies 12% upside potential.
