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Netflix stock, meanwhile, closed flat on Monday, climbing back from earlier session losses after JP Morgan analyst downgraded that stock to neutral from overweight.

Ali, what can you tell us?

Yes, so, when we think about why this happened, a big reason is because of valuation, right? We've seen this stock hit record after record. Shares are up about 30% since the start of the year. Since October 2022, we've actually seen shares surge nearly 400%, far outpacing the S&P 500 at around 60% over that same time period. And so far this year, Netflix has been viewed as this defensive name within Big Tech, right? There's been broader concerns about the regulatory environment, about higher prices, the uncertainty with tariffs, um and also the potential that the advertising landscape will slow down. So, uh, Netflix has been this safe haven throughout that. But recently we've seen, um, more, uh, tensions with US and China relations ease significantly. That's lifted the sector overall. So, JP Morgan arguing that this could prompt investors to rotate into names that have been more beaten down. So, think of meta, Amazon. Those are some companies that could potentially benefit from this rotation. Also, coming into second quarter, the Q2, uh, time frame, the summer months, usually a softer time period for Netflix.

Not many potential catalysts, maybe?

Exactly. So, catalysts are a little bit more quiet right now. So, this is really more a near-term call. Over the long term, JP Morgan is very bullish on Netflix. Clearly this is a company that is an outperformer. We have a lot of strong content coming down the pipeline with Squid Game, with Wednesday, with Stranger Things. Uh, ads continuing to do very well. The ad tier has a lot of momentum. So, all of that could prove that this downgrade is a little too cautious. But I think, uh, Doug Anmuth, who's an analyst here, he just wants to err on that side because the risk reward is a bit more balanced here considering you have share price that is well over 1,000 bucks now. So, potentially, maybe some bumps in the road in the near term, but overall

Tomorrow is Sesame Street by the way, for those of you.

Yes, Sesame Street. We talked about content, right? I mean, Sesame Street. I haven't seen a ton of analyst reaction to Sesame Street in particular. However, in our news room, there's been a lot of talk from our producers about how excited they are for this and this is clearly a push for Netflix to embrace more family-friendly content.

How can you not be excited? Look at that. Come on.

Yeah, we we love this. Cookie Monster, right? That's who I guess.

I tell you though, they they got a lot of work in the

Like Oscar the Grouch, which one is it? Which one is it? I don't I don't have any children. Don't talk to me.

And I I honestly as the parent here, I should be able to tell you, but I got to tell you, my six-year-old, Netflix has a lot of work to do. She's all YouTube all the time.

YouTube and YouTube is one of the biggest competitors for all of these streaming giants. YouTube is a huge competitor if you think about kids' content in particular. Disney Plus obviously, uh, probably the winner there, but also Paramount with Nickelodeon. Sesame Street has been on Max, which will soon be rebranded once again to HBO Max, uh, since 2016. So losing out some of that core content there, but Max is rebranding more towards adult content, towards more of the, uh, family content, not as much kid content. So this is just another opportunity for Netflix to take advantage of.

My kid probably watches a little, it's a little too much YouTube on the iPad, but

Yeah, you know what, I don't think she's only kid out there that's watching YouTube though, so.

No, not at all, not at all. Ali, thank you, appreciate it.