LT Weekly: Jul 17, 2026
While bank earnings were the shining star this week (though a lot of good news was priced in), TMT didn’t do too well with Netflix trading off more than -7% on the back of its results (see Theme #1), and semis, memory and AI infrastructure taking it on the chin (SOX fell -10%, DRAM fell -16%). IBM’s losing about ¼ of its value post earnings (customer spend shifted to AI computing products) and SpaceX shares significantly breaking their IPO issue price ($135) closing Friday at $124 also stood out. Ramping geopolitical tensions didn’t help as well, though economically, the much lower than expected June CPI was a big focus.
All in all, a lot was going on and we focused on the below in this edition:
- The Netflix Playbook Remains The Same, But Investors Wanted More
- Uber’s Sweetened Delivery Hero Bid Underscores The Attractiveness Of The Cross Platform (Mobility + Delivery) Opportunity
- Lawsuits, Hardware Ambitions, Ad Monetization Questions, And Model Delays Shaped This Week in AI
- Data Center Push Back Hits A New High, While Growth & Compute Demand Continue To Soar
- Media Entertainment / Studios Take The Spotlight
- Sports Remains On A Tear Between Viewership & Franchise Values But Not All Sports Media Rights Go Up
- Can Sentiment On Traditional Connectivity Get Any Worse?
- Grab Bag: Google vs PINS, Publicis (+), Resale Ticket Price Caps/StubHub
I hope you have a nice weekend and enjoy the read.
Best,
Leslie
P.S. **Reminder about the Summer Edition of our quarterly LionTree’s Sector Insights & A Look Ahead deck, which is accompanied by a ~20-minute video narration. Both of which can be accessed HERE **
The Netflix Playbook Remains The Same, But Investors Wanted More
Q2 was a similar narrative for Netflix as in Q1, given that the Co delivered a give-or-take in-line qtr with lowered expectations, while the Q3 guidance fell below Street projections and 2026 was largely maintained (though in this case with a narrowed revenue range). Aside from the decelerating top-line growth implied in the Q3 targets, investors were also not thrilled that Co is reducing engagement related disclosures going forward.
The latter point adds fuel to the fire on general engagement concerns, which have been an overhang for NFLX shares. Mgmt continues to reiterate that viewing hours are only one component of measuring engagement, given that all hours are not created equally. With that said, mgmt highlighted that view hours grew +2% y/y in H1:26 (up +1.5bn hrs to 97bn+) which is a slight accel vs +1.5% in 2025, despite competition from the Winter Olympics and World Cup. They also dismissed press reports that viewership of Season 2s was dramatically falling off from Season 1s, and in fact indicated that the Season 2 falloff has “actually slightly improved this year relative to last year.”
Aside from that, live remains an increasingly important component of Netflix’s content portfolio, as does new formats like video podcasting and cloud gaming. The TF1 partnership, while early, is showing positive signs and it wouldn’t be surprising to see similar deals on this front looking ahead. Mgmt reiterated that content amortization remains front-end loaded and overall content spend will rise +~10% y/y this year. Lastly, the doubling of the ads business also remains on track.
See more color below on the takeaways we found most impactful, including some comments on AI usage in production.