Following the end of its research restriction period, JPMorgan has resumed coverage of Netflix (NFLX.US) with an "Overweight" rating. The firm highlighted that a strong content pipeline, global subscriber growth, sustained pricing power, and an advertising business still in early monetization stages will collectively drive organic growth for the media technology company. Analysts noted that the ad-supported subscription tier is expected to expand the user base while contributing to high-margin revenue growth. "Netflix’s advertising revenue is projected to grow by over 150% year-over-year in 2025 and double to $3 billion by 2026," JPMorgan stated in a March 2 report. "With ongoing improvements in targeting and measurement technology, this segment has gained significant momentum." The report also forecasted that, aided by a $2.8 billion termination fee payment from Warner Bros. Discovery (WBD.US) and an attractive current stock price, Netflix will maintain strong free cash flow generation in 2026 and is likely to increase stock buybacks. On the application of artificial intelligence, JPMorgan suggested that algorithmic recommendations will enhance content discovery and personalization, while also improving advertising solutions and performance measurement, ultimately helping control production costs. "Compared to transactional business models, Netflix’s storytelling capabilities and talent pool serve as key competitive advantages, enabling it to better withstand industry disruption from AI advancements," the firm emphasized. JPMorgan set a $120 price target for Netflix, implying nearly 25% upside from current levels.