Bill Ackman, founder of Pershing Square Capital Management, held a Netflix position from January to April 2022 before selling every share at a loss of more than $400 million, according to Pershing Square’s 2022 investor communications.
He conceded at the time that Pershing Square had lost confidence in its ability to predict the company’s future with sufficient certainty.
Four years later, his hedge fund’s Q2 2026 semiannual disclosure revealed a new Netflix position representing 4.9% of Pershing Square’s $19.47 billion Form 13F portfolio, worth roughly $950 million as of the end of June 2026, the fund’s SEC filing confirmed.
What changed at Netflix since Pershing Square’s 2022 exit
The conditions that drove Ackman’s exit no longer apply, starting with subscriber scale and the cash generation that follows it.
Netflix produced $9 billion in free cash flow in 2025, a figure that would have been unthinkable during the subscriber-acquisition phase Ackman originally bought into.
Netflix also surpassed 325 million paid memberships by the end of 2025, up roughly 7.7% year over year, reflecting financial strength that did not exist when Ackman first owned the stock.
Bill Ackman argued in the firm’s mid-2026 investor letter that Netflix’s subscriber dominance has ended the competitive threat that drove his 2022 exit, and that the company’s financial trajectory now supports sustained earnings growth.
<strong>Netflix has since effectively won the streaming wars. Looking forward, we expect Netflix to compound revenue at a double-digit growth rate, with content costs growing more slowly than revenue driving continued margin expansion</strong>.
Warner Bros. Discovery provides the sharpest contrast. Netflix declined to raise its acquisition offer for the company, and the deal terminated as a result.
The termination yielded a $2.8 billion fee payable to Netflix, the Q1 2026 shareholder letter confirmed.
Netflix targets $3 billion in ad revenue as its next growth engine
Netflix’s advertising-supported subscription tier drove more than 60% of first-quarter sign-ups in the markets where the cheaper plan is offered. The number of advertisers on the platform grew 70% year over year to more than 4,000 clients during the same period.
Netflix guided ad-tier revenue to roughly $3 billion in 2026, roughly doubling from about $1.5 billion in 2025, according to Netflix’s Q2 2026 shareholder letter.
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Upfront advertising commitments for the 2026-27 season grew by close to 100% year over year, and Netflix President of Advertising Amy Reinhard confirmed that growth matched internal projections.
On the Q1 2026 earnings call, Netflix Co-Chief Executive Officer Greg Peters called the gap between ad-tier and standard-plan revenue per member a source of unrealized growth, with meaningful room to close it.
Netflix has also expanded its programmatic ad partnerships with Amazon, Google, The Trade Desk, and Yahoo to broaden automatic buying across the platform.
Management estimated that the platform currently captures just 7% of a roughly $670 billion addressable revenue market, leaving significant room for expansion.
Falling viewing hours divide Wall Street on Netflix’s outlook
Revenue growth is decelerating, with Chief Financial Officer (CFO) Spence Neumann targeting 13% to 14% top-line growth for the full year.
Content spending is climbing at roughly 10% this year, and viewing hours grew just 2% in the first half of 2026, Netflix Q2 2026 Shareholder Letter confirmed.
Steven Cahall, senior research analyst at Wells Fargo, downgraded the stock from Equal Weight to Underweight on Sept. 18, 2026, and cut his price target to $57, citing deteriorating engagement, Quartz reported.
Cahall estimated that subscribers watched 1.6 hours per day in the first half of 2026, roughly 8% below an adjusted 2023 comparison. He projected that hours from the top 100 original titles will fall 21% year over year in the second half on a thinner content slate.
Netflix repurchased $4.7 billion of its shares during the second quarter, its largest buyback on record, with about $27.1 billion still authorized, the firm’s Q2 letter stated.
Evercore ISI raised its price target to $110 the same week Cahall downgraded the stock, illustrating how deeply divided the analyst community remains, 24/7 Wall St reported.
What Ackman’s bet signals for streaming-stock decisions
The risk profiles from 2022 and 2026 share almost no overlap, and that distinction matters for investors evaluating streaming-stock exposure in this market.
Pershing Square’s letter declared the streaming war over and pointed to a scaled platform with industry-leading cash generation, a financial profile the company lacked during Ackman’s first attempt.
The deciding variable is whether the ad-tier revenue target is met while content costs remain disciplined, or whether declining engagement forces heavier programming spending, Cahall warned.
The pace at which daily viewing hours are falling creates measurable tension, and Netflix’s Oct. 20, 2026, earnings report is the next point at which that tension will show up in the reported numbers.
Related: Bill Ackman does U-turn on Netflix, makes bold claim
