Netflix Shares Fall most Since 2022 as Tax Hit Spooks Investors | Bloomberg Intelligence

Netflix’s third-quarter results were overshadowed by a Brazil tax dispute that cut into margins and helped trigger the stock’s sharpest drop since 2022. The analyst said the charge was mostly a catch-up item, with an ongoing cost of about $40 million a quarter, and argued that the bigger issue was how ordinary the quarter looked relative to very high expectations. Even stripping out the tax hit, the analyst said Netflix would have posted record operating margins, but investors were looking for a bigger revenue beat from a heavy second-half content slate.

The discussion also focused on Netflix’s openness to M&A, especially studio assets rather than cable networks. The analyst said that would be a defensive move, not a do-or-die requirement, while noting Netflix still has a large lead and spends about $17.5 billion to $18 billion a year on content. She argued AI could actually help by lowering content costs by 5% to 10%, while upcoming titles in 2026 should keep engagement and pricing power strong.

AT&T’s quarter was described as mixed: revenue slightly missed estimates, while subscriber growth beat expectations amid heavier promotion and lower wireless ARPU. The analyst said the company is leaning harder into fiber broadband and network upgrades as the broader broadband market shifts toward fiber, fixed wireless access and eventually more satellite competition.

Mattel’s results showed tariff uncertainty pushing retailers to delay orders, while Hilton’s report looked steady but perhaps too optimistic on future margins and growth. The analyst said Hilton’s U.S. business is weaker at the lower end, international growth is holding up better, and the company’s capital returns may be aggressive given an uncertain 2026.