Netflix’s strong rally lost momentum following the company’s stock split in late 2025. Although the streaming giant fell short of Wall Street’s earnings expectations in the third quarter, it continues to benefit from several compelling long-term growth drivers. Notably, Netflix shares are now trading near their lowest valuation in almost three years.

For much of 2025, shares of Netflix (NASDAQ: NFLX) were on an impressive run. By mid-November, the stock had climbed approximately 25%, outperforming both the S&P 500 and the Nasdaq Composite over that stretch.

That momentum shifted on Nov. 17, when Netflix completed a 10-for-1 stock split — its first in nearly a decade. Since the split took effect, the stock has declined about 19% as of the Jan. 9 close.

So what’s behind the recent selling pressure? And with shares now trading below $100, does this pullback present a buying opportunity for long-term investors?

Why Netflix stock has fallen

Two main factors appear to be weighing on Netflix shares.

First, the company missed analysts’ earnings expectations in its third-quarter report. While revenue growth remained strong — driven by solid subscriber gains and retention — profitability came in weaker than Wall Street had anticipated.

A more significant overhang, however, stems from Netflix’s pursuit of the film and television assets of Warner Bros. Discovery. Netflix is reportedly engaged in a competitive bidding process alongside Paramount Skydance Corporation, raising investor concerns about both the financing of a potential deal and the complexities of integrating Warner Bros.’ extensive content library into Netflix’s platform.

Uncertainty surrounding large acquisitions often dampens investor sentiment, and Netflix is no exception as the situation continues to evolve.

What could reignite a Netflix rally?

Despite recent headwinds, Netflix has rolled out several high-profile content releases in recent months, including the final season of Stranger Things and Frankenstein, directed by Guillermo del Toro.

Building on its content momentum, Netflix has also launched the first two locations of Netflix House, an immersive fan experience designed to bring viewers closer to their favorite shows. These venues feature interactive games and set recreations inspired by hit series such as Wednesday and Squid Game.

Together, these initiatives could drive stronger-than-expected subscriber growth in the fourth quarter and beyond, potentially restoring investor confidence and setting the stage for a rebound in Netflix stock.