Rivals’ Loss Signals Netflix’s (NFLX) Strong Moat

The article argues that Netflix’s competitive moat remains strong even as rivals lose users or fail, reinforcing the stock’s long-term investment case. Fundsmith added Netflix as a new holding in Q2 2026, citing Netflix’s scale, content spending power, and ability to expand via advertising, password-sharing enforcement, local content, and live sports. The note highlights that Netflix generated strong subscriber growth after cracking down on password sharing and that its ad-supported tier already has substantial traction. Despite recent share weakness over the past month and year, the article frames the decline in competitors as a positive structural tailwind for Netflix, potentially recapturing customers and supporting future growth. Overall, the tone is constructive on Netflix’s business resilience and profitability, though the stock itself was down on the day and over longer periods.