Yahoo Finance 10 Best Streaming Service Stocks To Buy
In this article, we will discuss the 10 best streaming service stocks to buy. If you want to skip our detailed analysis of the streaming industry and recent trends shaping the streaming market, go directly to 5 Best Streaming Service Stocks To Buy.
In recent years, the streaming TV landscape has seen a rapid expansion, with numerous new options entering the market. With a plethora of subscription internet TV services available, streaming entertainment has become a staple in American households, evidenced by the 99% of U.S. households subscribing to one or more streaming platforms. Leading the pack are Netflix, Inc. (NASDAQ:NFLX), Amazon.com, Inc. (NASDAQ:AMZN)'s Prime Video, and Apple Inc. (NASDAQ:AAPL)'s TV+. This widespread adoption reflects a shift in entertainment consumption, moving away from traditional cable TV models towards flexible, on-demand streaming options. On average, Americans maintain subscriptions to around 2.9 streaming services each month.
According to a research report by Fortune Business Insights, the video streaming industry is a significant economic force, currently valued at an impressive $544 billion. This valuation not only reflects the industry's current success but also hints at its rapid expansion in the future. Projections suggest that by 2030, the industry could skyrocket to a staggering $1,902 billion. The financial trajectory of the video streaming industry also continues to surge, with revenue expected to reach $43.97 billion in 2024 alone. This robust growth is anticipated to persist, with revenue forecasted to climb to $54.22 billion by 2027, boasting an annual growth rate of 7.53% from 2024 to 2027.
Data from Nielsen, a leading data and market measurement firm, proves that the rise of streaming services has fundamentally altered TV viewing habits, with streaming content now being the primary driver of TV usage. In 2023, American audiences streamed a staggering 21 million years of video, marking a 21% increase from the 17 million years' worth they streamed in 2022. Amid these viewership patterns, one clear beneficiary emerged: the TV show "Suits." Originally aired on USA Network from 2011 to 2019, "Suits" amassed a total of 57.7 billion viewing minutes in 2023, surpassing even the beloved favorite "The Office," which garnered 57.1 billion viewing minutes in 2020 during the pandemic-induced lockdowns. In total, the top 10 titles in the U.S. collectively garnered over 133 billion minutes of viewing time last year.
However, akin to other sectors, the streaming industry encounters its own set of challenges, most notably marked by heightened competition, which has spurred companies to invest billions in developing their own platforms and content libraries, aiming to compete with established industry leaders, which in turn prompted streaming services to adjust their subscription costs. For instance, The Verge reports that Netflix, Inc. (NASDAQ:NFLX) has made changes to its subscription offerings, discontinuing the ad-free Basic plan priced at $11.99 per month for new or returning members. Instead, the company is transitioning to a model where ad-supported plans are available in select countries, starting with Canada and the UK in the second quarter of this year. As a result, Netflix, Inc. (NASDAQ:NFLX)'s cheapest ad-free option is now priced at $15.49 per month. This increase in subscription rates can lead to higher number of subscription cancellation, as seen last year. In 2023, data analytics firm Antenna recorded 36.2 million more cancellations compared to the previous year, resulting in 17 million fewer net additions. This indicates that streaming services are facing a greater challenge in acquiring new subscribers despite their continued efforts.
On a different note, the music streaming scene in the U.S. has seen substantial evolution over the last decade. Presently, the United States records approximately 90 million paid music streaming subscribers, a significant leap from the mere 7.9 million users in the first half of 2014. Within the competitive realm of music streaming services, Spotify Technology S.A. (NYSE:SPOT) stands out as the clear frontrunner, holding a commanding 30.5% market share, while its closest competitor, Apple Music, trails with a 13.7% share.
In light of this, the burgeoning realms of streaming are not merely flourishing; they are fundamentally reshaping the landscape of entertainment and media consumption. The substantial financial implications, characterized by billions in revenue and considerable monthly expenditure on subscriptions, serve as a testament to the economic prowess wielded by these industries. With that in mind, investors looking to take part in this lucrative industry can look towards some of the best streaming service stocks to invest in, which include the likes of Amazon.com, Inc. (NASDAQ:AMZN), Netflix, Inc. (NASDAQ:NFLX), and The Walt Disney Company (NYSE:DIS).
Photo by Ashley Byrd on Unsplash
Our Methodology
In this article, we’ve curated a list of the best streaming service stocks based on hedge fund sentiment. While most of these stocks offer streaming platforms, a select few provide services within the streaming market and are set for growth from the overall industry. Our analysis is derived from Insider Monkey’s database of 933 elite hedge funds tracked as of the fourth quarter of 2023. The list is organized in ascending order based on the number of hedge fund holders in each company. Hedge funds’ top 10 consensus stock picks outperformed the S&P 500 Index by more than 140 percentage points over the last 10 years (see the details here). That’s why we pay very close attention to this often-ignored indicator.
10. Roku, Inc. (NASDAQ:ROKU)
Number of Hedge Fund Investors: 32
Established in 2002, Roku, Inc. (NASDAQ:ROKU) is a prominent American public company specializing in streaming devices and smart TVs. It is recognized for licensing its streaming technology to other manufacturers and operating an advertising business over its streaming network. With 70 million viewers as of 2023, Roku, Inc. (NASDAQ:ROKU) holds the position of the leading streaming TV network in the U.S.
On February 15, Roku, Inc. (NASDAQ:ROKU) unveiled its financial results for the fourth quarter and full year of 2023. The company disclosed an 11% year-over-year surge in total net revenue, reaching $3.5 billion, with platform revenue contributing $3.0 billion, marking a 10% increase from the prior year. Gross profit also experienced growth, reaching $1.5 billion, reflecting a 6% rise year-over-year. Moreover, the company's active accounts expanded to 80 million, indicating a 14% increase year-over-year, while streaming hours surged to 106 billion, representing an 18.6 billion hour increase from the previous year.
Insider Monkey analyzed 933 hedge fund portfolios for the fourth quarter of last year, revealing that 32 were shareholders of Roku, Inc. (NASDAQ:ROKU). During the same period, ARK Investment Management emerged as the largest shareholder of Roku, Inc. (NASDAQ:ROKU) in their database, with a substantial investment totaling $873.4 million.
Much like Amazon.com, Inc. (NASDAQ:AMZN), Netflix, Inc. (NASDAQ:NFLX), and The Walt Disney Company (NYSE:DIS), Roku, Inc. (NASDAQ:ROKU) ranks as one of the best streaming service stocks to invest in.
9. The Trade Desk, Inc. (NASDAQ:TTD)
Number of Hedge Fund Holders: 41
Headquartered in the United States, The Trade Desk, Inc. (NASDAQ:TTD) is a multinational technology company focusing on real-time programmatic marketing automation technologies, products, and services. With a commitment to personalized digital content, the company champions Unified ID 2.0 (UID2), a protocol designed to balance relevant advertising with user privacy concerns. In addition, The Trade Desk provides a cloud-based digital advertising purchasing and optimization platform catering to advertisers across various mediums, including CTV, display, audio, and digital out-of-home.
On February 22, Needham analysts maintained a Buy rating and a $100 price target on The Trade Desk, Inc. (NASDAQ:TTD).
During the December quarter of the previous year, 41 out of the 933 hedge funds profiled by Insider Monkey held shares of the firm. The Trade Desk, Inc. (NASDAQ:TTD)’s largest investor is Israel Englander’s Millennium Management, which owns 3.32 million shares valued at $239 million.
ClearBridge Investments mentioned The Trade Desk, Inc. (NASDAQ:TTD) in its fourth-quarter 2023 investor letter:
“We have chosen to source a significant number of ideas among companies earlier in their business lifecycle by focusing on four secular growth themes: data and analytics, onshoring/reshoring, information security and e-commerce. In addition to Microsoft, three of the four other new positions we initiated during the quarter fit within these focus areas: The Trade Desk, Inc. (NASDAQ:TTD), Monolithic Power Systems and Model N.
Trade Desk, in the communication services sector, is a disruptor in the advertising technology market, operating a cloud-based platform that enables buyers to manage their digital advertising campaigns. We added the shares on a pullback due to recessionary fears and ad buyer cautiousness.”
8. Warner Bros. Discovery, Inc. (NASDAQ:WBD)
Number of Hedge Fund Holders: 56
Warner Bros. Discovery, Inc. (NASDAQ:WBD) is a global media and entertainment firm that is divided into three business segments: Studios, Network, and Direct to Consumer. The company provides a variety of content, brands, and franchises across television, cinema, streaming, and gaming that operate under well-known brands, including Warner Bros. Motion Picture Group, Warner Bros. Television Group, DC, Discovery Channel, CNN, and HBO.
On February 23, Warner Bros. Discovery, Inc. (NASDAQ:WBD) announced a Q4 GAAP EPS of -$0.16 and a revenue of $10.28 billion, falling short of estimates by $0.10 and $140 million, respectively.
By Q4 of 2023 end, 56 out of the 933 hedge funds part of Insider Monkey’s database had bought Warner Bros. Discovery, Inc. (NASDAQ:WBD)’s shares. Natixis Global Asset Management’s Harris Associates was the biggest investor through its $904 million stake.
7. Comcast Corporation (NASDAQ:CMCSA)
Number of Hedge Fund Holders: 63
Comcast Corporation (NASDAQ:CMCSA), based in Philadelphia, is a prominent American multinational conglomerate in the telecommunications and media industry. Renowned for its cable television and high-speed Internet services under the Xfinity brand, Comcast Corporation (NASDAQ:CMCSA) stands as one of the largest broadcasting and cable television companies globally.
On January 30, analysts at Citigroup reaffirmed their Buy rating on Comcast Corporation (NASDAQ:CMCSA) along with a price target of $53.
According to Insider Monkey’s database of Q4 2023, 63 hedge funds held stakes in Comcast Corporation (NASDAQ:CMCSA), compared with 68 in the previous quarter. The collective stake value of these positions is nearly $3 billion.
6. Spotify Technology S.A. (NYSE:SPOT)
Number of Hedge Fund Holders: 68
Based in Luxembourg, Spotify Technology S.A. (NYSE:SPOT) operates as a digital music streaming company, renowned for its transformative impact on the music industry. Unlike traditional models based on album sales and performances, Spotify compensates artists based on the number of song streams. As of the end of 2023, Spotify boasted 602 million users globally, with 236 million paying subscribers.
Spotify Technology S.A. (NYSE:SPOT) recently announced plans to implement price increases of about $1 to $2 per month in five markets, including the U.K., Australia, and Pakistan, by the end of April. Notably, the company also plans to raise prices in the U.S., its largest market, later in the year. Barton Crockett, an analyst at Rosenblatt Securities, viewed these price hikes as promising, maintaining his buy rating on the SPOT stock and setting a price target of 315 in a client note.
As of Q4 2023, Spotify Technology S.A. (NYSE:SPOT) shares were owned by 68 prominent hedge funds tracked by Insider Monkey, with the total value of shares held by these hedge funds valued at $2.63 billion. Ken Griffin’s Citadel Investment Group was its largest hedge fund shareholder with ownership of 1.65 million shares valued at $311.16 million.
Spotify Technology S.A. (NYSE:SPOT) joins the ranks of Amazon.com, Inc. (NASDAQ:AMZN), Netflix, Inc. (NASDAQ:NFLX), and The Walt Disney Company (NYSE:DIS) as one of the best streaming service stocks to buy now.
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Disclosure. None. 10 Best Streaming Service Stocks To Buy was initially published on Insider Monkey.
