Netflix Gets Its Second Wall Street Downgrade in a Week as YouTube Eats Into TV Viewing Share

Netflix stock has had a brutal September, and Wall Street is increasingly blaming a familiar rival: Google's YouTube.

HSBC downgraded Netflix to Hold from Buy on Tuesday, September 22, cutting its price target to $76 from $96, according to Bloomberg and TheFly. Analyst Mohammed Khallouf's new target implies barely 3% upside from where the stock closed that day. Wells Fargo Securities downgraded the stock first, on Friday, September 18.

Wells Fargo Securities analyst Steven Cahall cut Netflix to an Underweight, sell-equivalent rating and slashed his price target from $80 to $57, a roughly 22% implied drop from the stock's prior close. "NFLX has lacked big original series & it's showing," Cahall wrote, according to The Hollywood Reporter.

The numbers back up the concern. Netflix shares fell 11% in September alone and are down about 23% year-to-date, according to Yahoo Finance's AlphaSpace data. The S&P 500 is up roughly 13-14% over the same stretch. The stock closed at $72.16 on September 22, down 1.64% on the day.

YouTube's Rising Share

Both downgrades point to the same underlying shift: YouTube is winning the living room.

HSBC's Khallouf wrote that YouTube captured a record 14.2% share of U.S. TV time in July, up 80 basis points year over year. Netflix's share, meanwhile, fell to a multi-year low of 7.8%, down 100 basis points. "YouTube has been benefiting, in our view, from a declining reception to NFLX's original content," Khallouf wrote, adding that "near-term recovery in engagement looks unlikely."

HSBC also found that viewing hours for English-language shows on Netflix's weekly Top 10 lists fell about 17% year over year in July and August, according to BigGo Finance's reporting on the note.

Khallouf said YouTube is locking down top creators with direct financing, bigger payouts, and priority marketing in exchange for exclusivity, and has rolled out a new "Shows" feature this summer that mimics Netflix-style episodic series. HSBC estimates YouTube will spend about $23 billion on creator payouts in 2026, compared with roughly $20 billion in cash content spending at Netflix, according to BigGo Finance. HSBC raised its 2027 and 2028 content-spending estimates for Netflix by about 2% while cutting its earnings-per-share forecasts for those years by 6% to 9%.

Wells Fargo's numbers point the same direction. Cahall's model assumes Netflix's top 100 original hours will fall 21% year over year in the second half of 2026, and his report flagged a slight year-over-year decline in engagement across the top 100 titles on the Nielsen Gauge, according to Stocktwits.

Netflix's Own Numbers Didn't Help

Netflix's second-quarter results didn't do the stock any favors. Sales missed estimates, third-quarter guidance came in cautious, and hours viewed on the platform rose just 2% in the first half of the year, according to Yahoo Finance. Bloomberg data cited by ON Invest shows the market has reacted negatively to Netflix's last five straight quarterly reports. The company is scheduled to report third-quarter earnings on October 20.

The stock's slide has also come while Netflix lost out on Warner Bros. Discovery, which Yahoo Finance reports is heading to Paramount instead, leaving Netflix without a library acquisition that might have padded its content pipeline.

The Bull Case Wells Fargo Itself Flagged

Even the bearish reports leave room for doubt. Wells Fargo's own note listed reasons it could be wrong: Netflix's content spend is at record levels and the company has "time & again delivered unexpected break-out hits"; its international slate is harder to forecast and could beat expectations; and Netflix may still have pricing power and margin upside beyond what the model assumes. Stocktwits also noted that retail sentiment on the platform remained "bullish" on Netflix even after the HSBC downgrade, with high message volume.

There's also a wrinkle in the competitive picture that Breitbart's coverage surfaced and the other sources didn't: Netflix, Amazon, and YouTube recently formed a joint Washington lobbying group, the Streaming Access and Choice Alliance, run through the trade group TechNet, to push back on lawmaker scrutiny of rising streaming costs, particularly around live sports. The same three companies Wall Street now frames as head-to-head rivals for viewer attention are simultaneously aligned against regulators.

US households' average monthly spending on subscription video jumped 22% year over year to $70 in 2025, according to HSBC's figures cited by Yahoo Finance, a trend the bank says is fueling "streaming fatigue" that could squeeze subscriber retention across the board, not just at Netflix.

Whether Netflix can reverse the engagement slide will show up in two places investors are already circling: the October 20 third-quarter earnings report, and whatever original content Netflix rolls out to answer what HSBC and Wells Fargo both describe as a thin back half of 2026.