MW Netflix investors are getting squeamish as Amazon makes inroads in the battle for streaming dominance

By Lukas I. Alpert

Netflix's stock has dropped 24% since its last earnings report, with investors worried that competitive pressures may be weighing on growth

Netflix's stock has fallen steadily since its last earnings call as investors have begun wondering if competitive pressure from rivals like Amazon could slow growth.

Netflix has long sat at the top of the streaming world, but that hasn't stopped investors from worrying about how long it will stay there.

The streaming giant's stock $(NFLX)$ has fallen 24% since the company's last earnings call in April, largely driven by concerns that competitive pressure may weigh on Netflix's growth potential over the long run.

"With Amazon leaning into Prime Video and YouTube also competing for more time spent, this is raising more questions on both Netflix engagement and long-term pricing power," Justin Patterson of KeyBanc Capital Markets wrote in a recent note to clients.

The recent trouble for Netflix started when it declined to raise its full-year targets for revenue, revenue growth, operating margin and advertising revenue, despite reporting first-quarter figures that blew past expectations.

A Netflix spokesperson said that the full-year forecast the company stuck with - which calls for $50.7 billion to $51.7 billion in revenue, a full-year operating margin of 31.5%, revenue growth of 12% to 14% and advertising revenue of $3 billion - does not suggest that growth is slowing in any way.

But investors had clearly expected more. Netflix shares fell almost 10% in the session immediately following the earnings release and have been on a steady decline since. The stock closed down for the eighth session in a row on Wednesday, marking its longest losing streak since November 2022.

During the last earnings presentation, Netflix executives argued that abandoning their $82.7 billion bid for Warner Bros. Discovery $(WBD)$ - which investors had viewed with dismay - and initiatives like expanding into live television events, leveraging AI and boosting revenue through increased pricing and advertising gave them wide latitude for growth .

But Wall Street hasn't been convinced. Patterson said subdued sentiment around Netflix has investors thinking about how rivals like Amazon Prime Video (AMZN) are affecting the overall streaming market and making it more competitive. Alphabet's $(GOOG)$ $(GOOGL)$ YouTube also has commanded the largest percentage of viewers among media companies for some time.

Patterson said Amazon's streaming service has some advantages that Netflix does not. For starters, it is bundled with the broader Amazon Prime subscription, which offers customers free shipping for items ordered from the e-commerce giant, so consumers are less conscious of the cost of the TV service.

Amazon also currently offers more live sports programming than Netflix and has a more established advertising-technology stack, which can draw from the data it has collected from its retail customers.

In its most recent earnings call, Amazon said it viewed its streaming offering as an important driver of new Prime member sign-ups and that the video business was "large and profitable in its own right."

Still, Netflix has routinely had the best customer-retention rates among its competitors, according to data firm Antenna, suggesting its cost is not a major barrier to keeping subscribers. Netflix is also actively seeking to increase its live sports offerings, increasingly experimenting with marquee events like the World Baseball Classic, the NFL's Christmas Day games and one-off boxing matches like the 2024 bout between Mike Tyson and Jake Paul.

Patterson noted that this is not the first time investors have grown uneasy about Netflix. Other instances often coincided with periods in which the streamer was between releases of its top series. Netflix has said it plans to put out more blockbuster releases in the second half of this year.

"The Amazon bear case has historically been its loudest when Prime Video content has been strong and Netflix is between major series," Patterson said. "As Netflix's content slate ramps up again, we suspect this concern moderates once again."

-Lukas I. Alpert

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June 04, 2026 13:11 ET (17:11 GMT)

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