Investors are looking for quality stocks, as they fear that Trump’s policies on trade will push the US into a recession by the second half of 2025.
While they are unlikely to include names that have historically underperformed during economic downturns, one could be a contender this year.
Enter Netflix Inc (NASDAQ: NFLX).
According to Jim Cramer, the streaming giant has a subscription model that is so strong it will likely stay in place despite the macro-uncertainty coming out of Washington.
Netflix has done well in the past during downturns
Netflix has historically performed well during economic downturns. Even the COVID epidemic or the Great Financial Crisis couldn’t make Netflix underperform.
The streaming giant is also doing better this year than most of its tech peers, despite Trump tariffs and fears of an impending recession.
Cramer said that NFLX is an excellent subscription service. “Once people have locked themselves into a great service they almost never cancel,” he told his Mad Money audience last night.
The former hedge fund manager believes that Americans will continue to use Netflix even if there is a recession in the economy. Netflix offers affordable entertainment options, making it ideal for times when consumers avoid more expensive alternatives.
Technicals indicate further upside for NFLX shares
Jim Cramer remains bullish on Netflix despite economic uncertainty, and also because the chart indicates further upside in its future.
The streaming giant recovered more than 10 percent in recent sessions, and that was on a strong volume. This is “a move that tells the truth”.
Note that technical indicators also point upwards. The MACD of NFLX shares has “recently crossed bullishly” and Chaikin Money flow is “slightly positive” at this time, he said.
Netflix Inc. does not pay a dividend at the moment to make it appear more attractive in advance of a possible recession.
Should you buy Netflix at current levels?
Cramer is not the only one who remains positive about Netflix despite concerns of an economic slowdown. MoffettNathanson analysts upgraded the mass media company last week.
The investment firm has now rated the Nasdaq listed firm as “buy”. It sees a potential upside of $1,100. This is about a 15% increase from current levels.
MoffettNathanson became bullish on NFLX because, according to its research report on March 18 , “it has won streaming wars.”
Netflix stock is up about 9.0% from its recent high. This means that it’s not too late to buy NFLX at a discount.
This post Will Americans cancel Netflix when the US economy slides into recession? This post may be updated as new information becomes available
