Bill Ackman's Pershing Square is betting on Netflix (NASDAQ:NFLX) again, establishing a new position four years after abruptly exiting the streaming giant at a loss. The comeback follows a roughly 50% decline from Netflix's June 2025 high of $134, which pushed its valuation from more than 40 times forward earnings to about 21 times, according to Pershing.

The thesis has changed considerably since 2022. Pershing argues Netflix has effectively won the streaming wars, with more than 325 million subscribers and a scale advantage that allows it to spread content costs across a much larger audience. Cash content spending has grown only about 2% annually since 2021, while operating margins expanded from 21% to roughly 31.5%. Pershing also estimates Netflix now converts about 90% of earnings into free cash flow, while advertising revenue is approaching $3 billion this year.

Netflix's latest results support part of that argument. Q2 revenue rose 13.4% to $12.56 billion, while operating margin reached 33.4%. Management expects 2026 revenue of $51 billion to $51.4 billion and a 31.5% full-year operating margin.

Pershing expects double-digit revenue growth and earnings to compound close to 20% annually, suggesting Ackman views the recent selloff as a valuation opportunity rather than evidence Netflix's growth story is breaking.

The size of Pershing's new Netflix stake has not yet been disclosed. Its upcoming 13F filing could give investors their clearest look at just how strongly Ackman has returned to the stock.