Netflix (股票代碼 NFLX) is set to release its third-quarter earnings report after the market closes on Tuesday. Following a period of volatility, investors are closely monitoring the growth momentum of its advertising business and the performance of its live programming segment for signs of improved earnings.

Year-to-date, Netflix's stock price has risen by approximately 40%, but its recent performance has lagged behind both the broader market and its technology peers. Concerns regarding user engagement growth, valuation rationality, and new competition from artificial intelligence-driven content platforms have all exerted downward pressure on the stock price.

According to Bloomberg consensus forecasts, Wall Street's performance expectations for this quarter are as follows:

Revenue: $11.52 billion, up from $9.82 billion year-over-year; Netflix's own guidance is $11.53 billion. Earnings Per Share (EPS): $6.94, compared to $5.40 in the same period last year; Netflix's own guidance is $6.87.

Note: Netflix has stopped disclosing detailed membership growth data. Analysts expect Netflix's quarterly performance will benefit from stable content output and strong live business performance, including the boxing match between Canelo and Crawford, which attracted over 41 million viewers globally, making it the highest-rated men's championship boxing match of the century.

Additionally, the animated hit "KPop Demon Hunters" has become the most-watched film in Netflix's history, amassing 325 million views. This achievement highlights the platform's ability to create phenomenal works from relatively niche intellectual properties (IPs).

Beyond overall performance metrics, investors will pay close attention to the growth trend of Netflix's advertising business, which is viewed as a core growth engine through 2026.

Recently, Netflix expanded its advertising reach through a new collaboration with Amazon (AMZN) for demand-side platform (DSP) services, providing marketers with more avenues to purchase ad space on its platform.

Morgan Stanley analyst Doug Anmoss stated that this move will "enhance the onboarding process for advertisers, increase purchasing flexibility, and improve effectiveness measurement," as it drives ad spending growth across 11 markets starting this quarter.

Anmoss predicts that Netflix's advertising revenue will grow rapidly, from $1.4 billion in 2024 to $2.9 billion in 2025 (over 100% increase), and will further grow by 45% in 2026, reaching $4.2 billion.

Earlier this month, Netflix announced a new collaboration with Spotify (SPOT) for video podcasts, planning to incorporate select shows from Spotify Studios and "The Ringer" platform into Netflix starting in early 2026, including well-known programs like "The Bill Simmons Podcast," "The Rewatchables," and "Serial Killers."

However, some on Wall Street have warned that Netflix's current high valuation has nearly no margin for error. Currently, Netflix's expected price-to-earnings ratio is around 45 times, significantly above the average for the overall market and its technology sector peers. Analysts from Morgan Stanley and Citigroup have cautioned that the market's optimistic expectations for its advertising package growth and user engagement may largely be reflected already in the current stock price.

Additionally, reports last month indicated that Paramount Skydance (股票代碼 PSKY) is considering acquiring Warner Bros. Discovery (WBD), a move that could reshape the streaming industry landscape and further heighten market uncertainty.

Morgan Stanley and Bank of America analysts believe that the likelihood of Netflix acquiring Warner Bros. is low, and even after a merger between Paramount and Warner Bros., there would not be an immediate threat to Netflix. Morgan Stanley pointed out that Netflix "is clearly not a company that leans towards acquisitions"; others, including Bloomberg Intelligence analyst Gita Ranganathan, echoed that Netflix prefers "organic growth" instead of "expansion through acquisitions."

Morgan Stanley analyst Ben Swinburne also emphasized long-term risks posed by generative artificial intelligence. In a report, he noted that while this technology could ultimately reshape the creation and distribution of video content, it does not pose an immediate threat.

"Native AI platforms could become the next generation of content distribution models," he wrote in a client report released on October 16, "and market leaders rarely extend their advantages from one cycle into the next."

At the same time, recent controversies have put Netflix under increased scrutiny, as Elon Musk has called for users to cancel their Netflix subscriptions, accusing the platform of promoting "woke" content. Following Musk's sharpest criticisms, Netflix's stock price fell by 5%, but such criticisms have subsided in recent weeks.