Netflix (NFLX) stock has tumbled over the past two trading sessions and that's a negative sign for the overall stock market. It could be a sign of capitulation.
In recent weeks, once hot stocks have sold off, including artificial intelligence stocks such as Nvidia (NVDA) and momentum plays like AppLovin (APP), Palantir Technologies (PLTR) and Reddit (RDDT).
↑ X NOW PLAYING What This Software Stock's Earnings Can Tell Us About The Health Of The AI MarketplaceNetflix stock joined the list of decliners on Thursday as it plunged 8.5% to close at 906.36. With the move, it fell below its 50-day moving average line, a key support level.
In midday trading on the stock market today, Netflix stock was down more than 4% to 868.44.
Netflix stock notched a record high of 1,064.50 on Feb. 14.
"When NFLX goes down over 9% in one day, that tells me we are starting to see some panic," Jordan Klein, a trading-desk analyst with Mizuho Securities, said in a client note Friday. "I mean, it has been the favorite hiding place for many in megacap tech."
Netflix has "zero tariff risk, pricing power and almost feels recession-proof," he said. Klein noted that there was some discussion of Netflix's heavy content spending this week, but a nearly 9% drop in Netflix stock "tells you that folks just want to reduce all exposure to equities right now."
Speaking at the 2025 Morgan Stanley Tech, Media & Telecom Conference on Wednesday, Netflix Chief Financial Officer Spencer Neumann said the streaming video leader plans to spend about $18 billion on content in 2025, Variety reported.
"We're not anywhere near a ceiling," Neumann said. "I think we are still just getting started."
Netflix stock is on two IBD stock lists: Big Cap 20 and Stock Spotlight.
Follow Patrick Seitz on X, formerly Twitter, at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.
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