History was made at the 70th Primetime Emmy Awards show on Monday. For the first time ever, Netflix (NASDAQ:NFLX) tied HBO for the most Emmy wins at 23. That marks the first time that a streaming platform has ever tied for first in Emmy wins, and is also the first time in 16 years that HBO didn’t outright win the most Emmys. It also was a win for Netflix stock
In other words, the TV show production game is changing. That change is favorable for Netflix. But, it doesn’t necessarily mean HBO is dead, or that AT&T (NYSE:T) stock is doomed. It also doesn’t mean Netflix will outright dominate the streaming category. Amazon (NASDAQ:AMZN) made a strong showing at the Emmys, too, and that’s a good thing for Amazon stock.
Broadly speaking, the investment takeaway from the 2018 Emmys is that Netflix stock is a buy, Amazon stock is a buy, and AT&T stock is a buy. Why? All three are winning the streaming wars in their own way, and the secular trend of streaming adoption is so big and happening so fast that the space will inevitably support multiple winners both today and in the future.
As such, I’m bullish on all three names.
Why Netflix, Amazon, and HBO All Are Winning
It is easy to look at the numbers from the 2018 Emmys, and come away with the conclusion that Netflix is the obvious winner. After all, five years ago, Netflix wasn’t even making its own shows. Now, the company had more nominations (112) than HBO (108) heading into the 2018 Emmys, and walked away with just as many wins (23).
Clearly, that is a testament to just how successful Netflix has been at creating compelling original content. In many senses, the Emmy numbers imply that Netflix is now the gold standard for content in the TV show world.
While that takeaway is factually correct, it isn’t the only thing to be taken away from the 2018 Emmys. There are two other big takeaways, too, and they are as follows:
- HBO is still mega-popular.
- Amazon is far from dead.
HBO was still tied for first in Emmy wins and has remained this industry’s top dog for nearly two decades. The network also nabbed the highest honor, Best Drama, with its widely watched Game of Thrones series, which had a record 22 nominations and nine wins. Another popular HBO show, Westworld, nabbed four Emmy awards, and Barry took home three.
Although Netflix is rising in Hollywood, HBO isn’t backing down. The network is more than holding its own on the original content front, and many would probably say that of the evening’s five best shows, HBO was behind three of them (Game of Thrones, Westworld, and Barry).
Thus, if original content keeps consumers on your platform, HBO looks solid for the foreseeable future.
Meanwhile, Amazon is taking baby steps in the original content production world, but those baby steps are promising. Amazon nabbed its first-ever series win at the Emmys with The Marvelous Mrs. Maisel. The show took home the prestigious Best Comedy award, and the show’s lead actress, Rachel Brosnahan, won Best Actress in a comedy series.
Those a pretty big wins for a relative Emmy newbie, and they speak to the fact that Amazon is taking steps towards becoming a legitimate contender in the streaming space.
The platform is far off from being on the same playing field as Netflix in terms of original content, but they also started later and haven’t dedicated as many resources to that pursuit.
All things considered, then, Amazon’s big wins with Mrs. Maisel are a materially positive development for Amazon Video.
Why Buy Amazon, AT&T and Netflix Stock
Everyone is going from linear to internet video consumption. But, that doesn’t mean everyone is going from cable exclusively to Netflix. Instead, just as traditional cable viewers watched multiple networks, internet streaming viewers are often subscribed to multiple streaming networks.
At scale, this means that there is a ton of room for Netflix, Amazon, and AT&T to all grow their streaming offerings.
Netflix stock looks good here because the company is the leader in this space. They have the biggest audience, and arguably the best content portfolio. The stock has also shown resilience in the lower $300’s, and is now bouncing back.
More important, recent original content strength implies that next quarter’s numbers could be good. If so, Netflix stock could be on track to re-take its $400-plus highs before the year is out.
Amazon stocks looks good here for multiple reasons. Amazon Video is doing well. That’s a positive for the stock. But, Amazon stock is also powered by a still red-hot e-commerce business, a rapidly growing offline retail business, a rapidly growing digital advertising business, and a market leading cloud business.
Between those four drivers, this stock still has a ton of firepower left to head way higher over the next several years.
AT&T stock looks good here because cord-cutting fears are overstated, and streaming upside is understated. Yes, this company will continue to lose cable subs. But, recent quarterly numbers have shown a promising stabilizing trend in cable viewers.
Also, the company’s streaming business, headed by DirecTV NOW, is doing very well. If streaming does entirely kill the cable business, then AT&T will inevitably morph into a leader in the streaming space as its streaming services pick up subs. In other words, AT&T will win no matter where engagement goes.
Overall, I like all three of these stocks here. Netflix stock is a secular winner. Same with Amazon stock. And, AT&T stock is a survivor.
Bottom Line on Streaming Stocks
Netflix stock was the big winner in the 2018 Emmys, but Amazon stock and AT&T stock also won in their own ways. At this point in time, it is probably best to own all three names.
As of this writing, Luke Lango was long NFLX, AMZN, and T.
