In a market that has felt like a horror show for much of 2025, Netflix has been one of the few feel-good stories in town.

The video streamer looks like the rare sort of stock that can outperform no matter what happens on the trade front. Its shares, at a recent $1,173.25, have jumped 25% since April 2, when President Donald Trump's tariff plans sparked a brutal and broad selloff, while the S&P 500 index is up 4.1% over the same period. On Thursday, Netflix was less than $1 billion away from closing with a market value of $500 billion for the first time.

It isn't hard to see why Netflix has become one of the market's go-to safe havens. It imports content, not goods, so there's little risk of the White House's reciprocal levies driving up its costs. Shares dipped just 2% the day Trump threatened to impose 100% import duties on foreign movies, as investors realized that the company could mitigate much of the earnings impact by either shifting production to the U.S. or raising its prices.

The stock also has a pedigree as a name that can outperform in times of macroeconomic uncertainty, racking up double-digit gains during the Covid-19 pandemic as widespread lockdowns led to users plowing through smash-hit series like Tiger King and The Last Dance.

But while other perceived havens like gold could struggle now that the Trump administration has brokered a deal with China to cut most tariffs for 90 days, Netflix ought to be able to build on its strong run this year.

The only real mark against the stock right now is valuation. Due to the recent rally, shares aren't cheap -- they currently fetch about 43 times future earnings, meaning they're trading at a significant premium to both the benchmark S&P 500, at 21 times, and the Magnificent Seven group of megacap tech names it's often compared with, at 27 times.

Still, Netflix has averaged a price/earnings ratio of 52 over the past five years, so judging by recent history it isn't expensive. Over that time the stock has gone from "a loss-making challenger where everyone was skeptical about how much it's spending on content to a reliable, profitable compounder," Ben James, a strategist at the Edinburgh-based investment management firm Baillie Gifford's U.S. growth fund, tells Barron's. The firm holds a little more than 4 million shares, a position that's valued at about $4.5 billion.

The bull case hinges on the idea that the streamer will be able to grow earnings at a fast enough rate to maintain the stock's recent momentum. James argues that operating margins, currently at 27%, could nearly double by the end of 2030.

He says that over the past decade, Netflix has managed to engineer a self-sustaining cycle of growth in which more subscribers means more money to spend on content, which in turn attracts even more users. The streamer has already done the hard work, pouring money into creating a vast library of films and movies.

"It's invested so much in its own content that it's built a flywheel that will be key to growing its margins," James says. "When we first invested in 2015, its margins were about 4.5%, and our forecast was they would reach 50% within 10 to 15 years. So it's over halfway there, and we still think it can get there."

Executives are targeting a $1 trillion market capitalization by the end of 2030, The Wall Street Journal reported last month, up from $484 billion right now. Even at Netflix's current lofty valuation, it would be all set to hit the 13-figure threshold if it could manage the necessary margin growth.

The rollout of cheaper subscription plans could also help supercharge profit. Netflix unlocked a fresh revenue stream when it introduced ad-supported tiers in November 2022. Ads accounted for just 4% of revenue in 2024, but the company projects ad revenue to double this year, and its advertising president, Amy Reinhard, said Wednesday that the ad-supported tiers had added 24 million users over the past six months. James thinks the streamer will soon be able to leverage artificial intelligence to target users and make the tiers more profitable.

Live sports programming could also help the streamer reach untapped markets. It might seem like every household has a Netflix account, but there's still plenty of room for the streamer to grow. For the fourth quarter of 2024, it reported 301.6 million subscribers globally. Three years ago, Chief Financial Officer Spencer Neumann estimated a total addressable market of between 700 million and 1 billion homes.

Netflix might not even be a pure-play streamer for much longer. In February the company opened its first restaurant, Netflix Bites in Las Vegas, where fans can tuck into dishes inspired by well-known films and TV shows. It's also set to launch two experiential venues it's dubbed Netflix Houses sometime later this year.

All that makes for a tempting growth story. Analysts polled by FactSet expect earnings before interest, taxes, depreciation and amortization, or Ebitda, to rise 26% this year, another 20% in 2026, and then another 18% in 2027.

Despite Netflix's stellar gains this year, investors shouldn't feel like they've missed the boat. Surging profit could quickly make the streamer look cheap again. Sometimes it's worth paying a premium for that.