If you’re trying to identify the best-performing stocks of this century, Netflix<\/strong> (NFLX<\/a> 0.74%<\/span>)<\/span> should probably be on that list. Over the past two decades, the streaming stock<\/a> has soared 22,050% (as of May 22). Netflix has clearly done things right from an operational and strategic perspective to deliver a remarkable performance like that.<\/p>\n The business, which now sports a market capitalization of $373 billion, has certainly developed an economic moat<\/a>. But is it the widest one in streaming?<\/p>\n Image source: The Motley Fool.<\/p>\n<\/div>\n Netflix has experienced such rapid growth because it was early to the streaming race. People found it provided a drastically better experience than cable TV.<\/p>\n As of Dec. 31, 2025, Netflix had over 325 million subscribers, up from 71 million paid members 10 years before. In 2026, management expects the company to report about $51 billion in revenue. This is a scaled operator, enabled by its first-mover advantage.<\/p>\n That scale provides a cost advantage<\/a>, which supports Netflix’s moat. Unlike subscale peers, this business produces meaningful profits. Its operating margin was 32.3% in Q1 (ended March 31). And leadership’s forecast calls for $12.5 billion in free cash flow for all of 2026.<\/p>\n Plus, it’s hard to underplay the brand. Netflix’s name has become synonymous with streaming video. And it’s often used as a verb, indicating robust consumer mind share.<\/p>\n Scale is clearly a key component for streaming businesses to achieve profitability. Just look at Walt Disney<\/strong><\/a>, which is one of the few streamers that can be mentioned in the same breath as Netflix.<\/p>\n For years, the House of Mouse was posting significant operating losses within its streaming segment, which is anchored by flagship service Disney+. Since the third quarter of fiscal 2024, the company’s direct-to-consumer operations have generated ballooning profits. With higher revenue and a larger subscriber base that can absorb sizable content investments, the bottom line has exploded.<\/p>\n Competition for attention is fierce. And these days, Netflix has to go up against a formidable opponent, a powerful technology titan, in the battle for eyeballs. I’m talking about Alphabet<\/strong>‘s (GOOGL<\/a> 1.21%<\/span>)<\/span> (GOOG<\/a> 1.04%<\/span>)<\/span> YouTube.<\/p>\nScale is critical in streaming<\/h2>\n
Netflix’s rival possesses a powerful network effect<\/h2>\n
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