Analysts On Some Of My Favourite Stocks

Pricing Power At Netflix

Moving away from financials, Netflix’s recent price hikes, alongside its investment in high-quality original content, are expected to drive stronger-than-anticipated top-line growth in 2025. The standard plan without ads will rise from $15.49 per month to $17.99, while the ad-supported tier will increase by $1 to $7.99. The premium plan has been adjusted from $22.99 to $24.99. 

Unlike competitors that raise prices to achieve profitability, Netflix’s ability to maintain pricing power stems from its aggressive content strategy, which has consistently attracted and retained subscribers. Shows like Squid Game, Arcane, and Wednesday, along with its expansion into sports programming, demonstrate the company’s commitment to delivering exclusive, high-value content that resonates with its audience.

Beyond its core streaming business, Netflix continues to enhance its ad-tech capabilities, with management signaling improvements in targeting, programmatic availability, and measurement tools. These enhancements are expected to be accretive to both top- and bottom-line performance in 2025. Additionally, Netflix’s expansion into mobile gaming is broadening its audience reach. The company offers games tailored to different age groups, from CoComelon for toddlers and SpongeBob for younger kids to more mature titles like Grand Theft Auto, Narcos, and Money Heist for adult audiences. 

Netflix’s move into live sports streaming is another major growth driver, with high-profile events such as the Logan Paul vs. Mike Tyson fight and NFL games significantly boosting paid subscriber additions. The platform has recorded its highest-ever streaming numbers for NFL broadcasts, demonstrating strong consumer engagement. As Netflix’s share of total U.S. viewership increased from 7.6pc in May 2024 to 8.5pc in December 2024, its deeper push into live sports adds further value to its subscription model. 

Barchart, 6 February 2025

Podcasting Has Become A Major Revenue Generator At Spotify

Spotify’s growth strategy is being driven by multiple factors, including rising ad revenue from podcasts, international market expansion, and improved ad-targeting technology that enhances both user engagement and advertiser appeal. The company’s podcast segment has become a major revenue generator as listener engagement with non-music content continues to grow. The addition of audiobooks to premium plans in select markets is another strategic move aimed at boosting retention by offering subscribers more value. Meanwhile, Spotify’s international expansion, particularly in Latin America, is fueling strong user growth, supported by localized content and flexible payment options that improve accessibility.

On the advertising front, Spotify is leveraging dynamic ad insertion, which allows for more precise targeting and higher ad rates. The company’s AI-driven personalization tools, such as AI DJ and curated playlists, are keeping users engaged, making the platform even more attractive to advertisers. 

Beyond audio, Spotify is expanding into video content at an accelerating pace. Over 170m subscribers have streamed video on its platform, a significant jump from just 10 million five years ago. Video podcasts have also seen explosive growth, with over 300,000 shows available and a 60pc increase in monthly views over the past year. User engagement continues to rise, with the average time spent on the platform reaching approximately 40 hours per month. This deep level of user engagement not only strengthens Spotify’s ecosystem but also reinforces its ability to scale advertising revenues while driving long-term subscriber retention.

Barchart, 6 February 2025

Stock Splits On The Horizon For Netflix & Meta Platforms

Bank of America analyst Jared Woodard says US companies are choosing to split stocks at a pace not seen in at least a decade.

Why? Because stocks that split have a history of offering returns that far exceed the average market return over the next 12 months, according to the firm’s recent research.

That said, two names: Netflix and Meta Platforms look particularly ripe for a stock split in 2025. Here’s what each of these two has in store for investors this year.

Invezz, 6 February 2025

Meta Platforms bet heavily on AI

The tech titan is currently firing on all cylinders on the back of its commitment to artificial intelligence. Just last week, Meta said it will spend as much as $65bn this year mostly on AI infrastructure.

So, it’s reasonable to believe that Meta shares, much like NFLX, will rip higher moving forward – and Mark Zuckerberg could make the potential upside that much easier to materialize by opting for a stock split and making META more accessible for an average investor.

Invezz, 6 February 2025

No question Mark Zuckerberg is an inspirational CEO

This is going to be a really big year. I know it always feels like every year is a big year, but more than usual, it feels like the trajectory for most of our long-term initiatives is going to be a lot clearer by the end of this year. So, I keep telling our teams that this is going to be intense because we have about 48 weeks to get on the trajectory that we want to be on. In AI, I expect that this is going to be the year when a highly intelligent and personalized AI assistant reaches more than 1 billion people, and I expect Meta AI to be that leading AI assistant.

Meta AI is already used by more people than any other assistant. And once a service reaches that kind of scale, it usually develops a durable long-term advantage. We have a really exciting road map for this year with a unique vision focused on personalization. We believe that people don’t all want to use the same AI.

I also expect that 2025 will be the year when it becomes possible to build an AI engineering agent that has coding and problem-solving abilities of around a good mid-level engineer. And this is going to be a profound milestone and potentially one of the most important innovations in history, like as well as over time, potentially a very large market, whichever company builds this first, I think it’s going to have a meaningful advantage in deploying it to advance their AI research and shape the field.

Mark Zuckerberg, CEO, Meta Platforms, Q4 2024, 29 January 2025

These guys are playing at enormous scale.

These are all big investments, especially the hundreds of billions of dollars that we will invest to AI infrastructure over the long term. I announced last week that we expect to bring online almost a gigawatt of capacity this year. And we’re building a two-gigawatt and potentially bigger AI data centre that is so big that it would cover a significant part of Manhattan if it were placed there. We’re planning to fund all of this while, at the same time, investing aggressively in initiatives that use these AI advances to increase revenue growth.

Mark Zuckerberg, CEO, Meta Platforms, Q4 2024, 29 January 2025

It is incredible how fast Meta Platforms is growing for such a large company.

I expect reels on Instagram and Facebook to continue growing. I expect Threads to continue on its trajectory to become the leading discussion platform and eventually reach 1bn people over the next several years. Threads now has more than 320m monthly actives and has been adding more than 1 million sign-ups per day. I expect WhatsApp to continue gaining share and making progress toward becoming the leading messaging platform in the U.S. like it is in a lot of the rest of the world. WhatsApp now has more than 100m monthly actives in the U.S. Facebook is used by more than 3bn monthly actives, and we’re focused on growing its cultural influence.

Mark Zuckerberg, CEO, Meta Platforms, Q4 2024, 29 January 2025

Exciting!

So, this is going to be a big year. I think this is the most exciting and dynamic period that I have ever seen in our industry. Between AI glasses, massive infrastructure projects, doing a bunch of work to try to accelerate our business, and building the future of social media, we have a lot to do. And I think we’re going to build some awesome things that shape the future of human connection.

Mark Zuckerberg, CEO, Meta Platforms, Q4 2024, 29 January 2025

Why Palantir’s Business May Be Poised To Explode

Similar to how AlphaGo used reinforcement learning to reach superhuman levels of Go, Generative AI is at a point where pure reinforcement learning is leading to superhuman levels of capabilities. Once a model reaches a certain intelligence level, it can bootstrap itself to perform increasingly complex tasks due to pure reinforcement learning and high-quality synthetic data generation. Palantir is perfectly placed at the centre of this AI revolution, given its growing dominance in the operational AI application layer. Unlike companies involved in foundation model training and research, Palantir gains all the upside of rapidly improving AI without the downsides of pouring billions of dollars into foundation model development.

Simple Investment Ideas, 6 February 2025

Palantir Technologies is positioned as a prime beneficiary of these recent AI innovations. Originally known for its platforms in national security and enterprise data integration, Palantir is now embedding chain-of-thought AI throughout its product suite. The company’s core mission of turning raw data into effective decisions fits perfectly with advanced reasoning models. Palantir can provide “copilot” AIs that break down a problem in multiple stages, consult an organization’s data, test possible outcomes, and present a final recommendation that is transparent.

Palantir’s strengths shine when high-stakes environments demand clear accountability. A purely generative AI might produce compelling text, but might also be prone to errors or lack detail on how it arrived at a conclusion. By contrast, a chain-of-thought AI can lay out a step-by-step analysis, which is especially important in defense, healthcare, or manufacturing. Clients want to see the logic behind decisions and a reliable means to catch mistakes. A reasoning AI fits neatly into Palantir’s framework of ingesting/integrating data from multiple sources and giving decision-makers tools they can trust.

Recent quarterly results is further evidence of Palantir’s strong momentum. The company reported Q4 revenue of $828m, up 36pc year-over-year, far surpassing analysts’ estimates. Its U.S. commercial and government revenue grew by 54pc and 45pc respectively. What’s even more impressive is the fact that Palantir grew this fast while achieving an adjusted operating margin of 45pc.

Palantir is expecting roughly 31pc annual revenue growth in 2025, predicting a total near $3.75bn. Government contracts will remain a major component as the company is still regularly securing deals in excess of $100m to deploy AI-driven analytics. On the commercial side, deals with industries like telecom, banking, and logistics are growing faster than ever. This can partly be attributed to how easily state-of-the-art AI fits into Palantir’s existing data pipelines.

Investors have taken notice. Palantir’s stock price soared over 300pc in 2024. Some analysts now compare it favorably to premier “AI platform” companies, pointing to its operational results rather than purely theoretical or consumer-level AI. While the share price could see volatility given its high multiples, Palantir’s business resonates with a market hungry for real-world AI deployments.

If chain-of-thought and reinforcement learning continue to accelerate AI’s capabilities, software platforms that can deploy these models securely and at scale will have a huge competitive advantage. Palantir has spent years building precisely that kind of infrastructure. The company is able to deploy AI behind firewalls, manage sensitive data, and continually update models. Its government business provides large, stable contracts that fund ongoing R&D, while the commercial side gives it a path to massive growth.

Palantir’s emphasis on delivering decisions and not just analytics aligns perfectly with the strengths of next-generation AI. Companies and agencies often need to see exactly how or why an AI recommends a specific plan. Chain-of-thought reasoning can make that logic traceable, especially as Palantir offers a powerful data pipeline for the AI to consult, interpret, and refine. This relationship suggests Palantir will remain at the forefront of enterprise-level AI.

One final point to note is that a competitive environment where AI models are exploding in capabilities is only a positive for Palantir given its uniquely strong place on the AI application layer. The same could not be said about the companies actually building the AI given how quickly these models commoditize and technological obsolescence occurs given the sheer speed at which newer models are improving.

The rise of chain-of-thought AI and large-scale reinforcement learning is about more than incremental gains in model accuracy. It signals a shift toward AI that can decompose problems, search for evidence, correct its missteps, and converge on solutions with minimal human input. Powered by the near-infinite tasks on the internet, we may see an unprecedented leap in what many leading AI figures are viewing as a “hard takeoff” in AI capability.

Palantir represents a compelling investment in this AI environment. Palantir’s end-to-end platform could become an industry backbone, allowing algorithms to have real-world impact. While Palantir looks incredibly pricey at its current valuation of $236bn and P/E ratio of 525, the company is still a buy due to its incredible positioning in a game-changing industry.

Simple Investment Ideas, 6 February 2025

Palantir Technologies — PLTR-Nasdaq Buy — $102 on Feb. 4 by BofA Securities With the artificial-intelligence market becoming crowded with more commoditized solutions, we think that Palantir’s value proposition is only becoming more pronounced. Palantir’s focus on operationalizing data, establishing high-fidelity digital enterprise-twins, and accelerating decision-making is a winning formula.

We expect further market value to be awarded to the artificial intelligence value-adders vs. commodity distributors, and we stand firmly behind the proposition that Palantir will remain a value adder. We raise our price objective to $125 from $90 as growth is set to accelerate meaningfully.

Barrons, 8 February 2025 (BofA Securities)

Share Recommendations

Netflix NFLX

Spotify SPOT

Meta Platforms META

Palantir PLTR