Here's why the Netflix share price just popped 12% overnight

Netflix stock has just made an extraordinary move.

| More on:
A group of young people sit together watching a television very intently with wide-mouthed, awed expressions while one holds a large bowl of popcorn with a bottle of beer in the foreground.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Last night's trading on the United States markets saw something rather incredible happen with the Netflix Inc (NASDAQ: NFLX) share price.

It was a tough night for most of the US markets last night (our time). America's Wednesday session saw the Dow Jones Industrial Average Index (DJX: .DJI) crash 0.98%, while the tech-heavy Nasdaq Composite Index (NASDAQ: .IXIC) cratered an even worse 1.62%.

Initially, it wasn't much better for the Netflix share price. The US streaming giant and tech share closed ordinary trading down a hefty 2.26% to US$346.19 a share.

But what happened in after-hours trading is what's truly remarkable. By the time the after-hours markets had closed, Netflix stock had vaulted back up to US$390.61 a share. That's a gain of 12.83% over where the company closed at during normal trading.

The catalyst for this extraordinary after-hours surge was Netflix's latest quarterly earnings report.

Netflix share price surges on stunning quarterly earnings

As our Fool colleagues over in the United States went into this morning, Netflix reported quarterly revenue of US$8.54 billion for the third quarter of 2023, 7.8% higher than the US$8.19 billion from the same quarter last year.

Net income came in at US$1.68 billion, again a pleasing rise over last year's figure of US$1.4 billion. This enabled Netflix to declare diluted earnings per share (EPS) of US$3.73, a 20.3% surge over the US$3.10 per share reported for 2022's third quarter.

In terms of raw subscriptions, Netflix was sitting on 247.15 million global streaming paid memberships at the end of the quarter, up 10.8% over the 223.09 million it reported this time last year.

As our Fool colleagues reported, analysts were expecting US$3.49 in earnings per share, as well as 243.88 million subscribers. So these numbers are a handy beat.

This explains why the Netflix share price rocketed so enthusiastically in after-hours trading this morning.

Even so, this latest share price surge doesn't put the Netflix share price even close to the new 52-week high of US$485 that we saw back in June. The streaming giant is also still a very long way from its all-time high of more than US$690 a share that we saw back in October 2021.

Motley Fool contributor Sebastian Bowen has positions in Netflix. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Netflix. The Motley Fool Australia has recommended Netflix. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on International Stock News

Investor looking at falling ASX share price on computer screen
International Stock News

Nvidia stock drops 6.5%, dragging artificial intelligence stocks lower

Is the AI bubble bursting?

Read more »

A cool young man walking in a laneway holding a takeaway coffee in one hand and his phone in the other reacts with surprise as he reads the latest news on his mobile phone
International Stock News

Thinking about buying Nvidia stock? Here's why you might already own it

You might not have missed out on Nvidia's gains after all.

Read more »

Man smiling at a laptop because of a rising share price.
International Stock News

Nvidia investors just got some bullish news

The GPU leader has opportunities for robust growth beyond the artificial intelligence market.

Read more »

A beautiful ocean vista is shown with a woman whose back is to the camera holding her arms up in triumph as she stands at the top of a rock feeling thrilled that ASX 200 shares are reaching multi-year high prices today
International Stock News

Is Nvidia stock going to $200 in the wake of its 10-for-1 stock split?

Wall Street analysts are boosting their price targets in the wake of Nvidia's high-profile stock split.

Read more »

A boy with a gold crown stands stoically looking straight ahead.
International Stock News

Can anyone topple Nvidia as the king of artificial intelligence investments?

There are many comparisons, but nearly all fall short.

Read more »

A woman stands triumphant with arms outstretched as she overlooks a city at sunset.
International Stock News

Nvidia shares reach world's most valuable milestone. Where to now?

Nvidia beats out Apple and Microsoft to be number one in the world.

Read more »

A woman looks nonplussed as she holds up a handful of Australian $50 notes.
International Stock News

Is it too late to buy Nvidia stock?

Nvidia is a big AI winner right now, but how much further can the winning streak go?

Read more »

A woman is left blank after being asked a question, she doesn't know the answer.
International Stock News

Insiders are selling Nvidia stock. Should you?

When a company's executives and board members sell their shares, it can raise concerns. But Nvidia's insider sales don't appear…

Read more »