One trillion is a substantial figure–an astronomical magnitude. To put that into perspective, if you started counting aloud, one number per second, it would take you over 30,000 years to reach 1 trillion.

This colossal scale also applies to $1 trillion in monetary terms. It’s a mind-boggling sum, difficult to fathom, yet undeniably substantial. Several companies already belong to the esteemed “$1 trillion club,” and undoubtedly, more will ascend to this elite status in the next decade. The burning question looms: Can Netflix (NASDAQ: NFLX) clinch a spot among them? Let’s delve deeper.

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Understanding the Prestigious $1 Trillion Club and its Inductees

First things first: The market capitalization of a company signifies its value. It’s determined by multiplying the stock price by the outstanding shares. For instance, if a company’s stock trades at $100 with 1 million shares outstanding, its market cap would stand at $100 million.

At present, there are six US companies boasting market caps above $1 trillion: Microsoft, Apple, Nvidia, Alphabet, Amazon, and Meta Platforms. Furthermore, there are 25 other American firms with market caps ranging between $200 billion and $1 trillion, colloquially referred to as megacap stocks. Netflix is part of this league.

Assessing Netflix’s Potential to Reach a $1 Trillion Valuation by 2035

As of now, Netflix holds a market cap of $280 billion. Yet, this isn’t its pinnacle. The company is recuperating from a significant downturn in 2021/22, witnessing a 76% plunge over six months due to subscriber concerns. Notably, Netflix shares have surged since mid-2022, up 246% and nearing its all-time high of $691.

However, setting a new record high diverges from attaining a $1 trillion market cap. To join the $1 trillion echelon, Netflix would need to quadruple its market cap over the next decade and a half.

Could this feat be accomplished? Plausible, yet arduous. Assuming Netflix can sustain a compound annual growth rate (CAGR) of 13% for the next 10.5 years, it may indeed touch a $1 trillion valuation. While this exceeds its previous five-year growth rate, it’s a challenging but conceivable goal.

NFLX Market Cap data by YCharts

Over the past five years, Netflix’s market cap has ascended from $153 billion to $279 billion, achieving a CAGR of 12.7%. Should this growth pace be maintained, Netflix’s market cap could soar to $980 billion over the next 10.5 years.

Evaluating Netflix as an Investment Prospect

Regardless of Netflix’s eventual trajectory toward a $1 trillion valuation, the pivotal consideration for investors pertains to its viability as a buy-and-hold asset.

Financially, Netflix exhibits robust performance. Its revenue has surged by approximately 15%, with earnings skyrocketing by 79% year over year. Moreover, free cash flow per share—a pivotal financial metric—has expanded tenfold over the past five years.

However, concerns linger regarding the stock’s valuation. Netflix’s price-to-earnings multiple is notably high at 45x, surpassing the S&P 500 average.

Nonetheless, for investors with a long-term perspective, Netflix warrants consideration. Eventually, there could be myriad reasons, potentially a trillion-dollar incentive, to hold the stock.

Contemplating an Investment in Netflix Now

Prior to investing in Netflix, ponder this:

The Motley Fool Stock Advisor analyst team recently identified what they deem the 10 best stocks for investors to acquire presently, with Netflix not occupying a spot on the list. The selected 10 stocks are anticipated to yield substantial returns in the ensuing years.

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