Netflix Faces Critical Support Test Ahead of Second-Quarter Earnings

Netflix shares are approaching a closely watched technical threshold this week as the company prepares to report its second-quarter financial results after the market close on Thursday, with analysts and traders tracking whether the stock can hold the $70-per-share level.

NYSE insider Jay Woods flagged the situation in remarks to CNBC, describing the stock as "beaten down" and warning that a disappointing earnings report could send shares below that critical mark for the first time since September 2024.

"This stock has been beaten down," Woods said, noting that investors should watch for what he called a "fold" in the company's chart — a pattern suggesting the stock's prior price action could repeat itself in reverse. "If not, we have a major breakdown," he added.

Netflix shares have declined roughly 40% over the past year, a slide attributed to a combination of factors: underwhelming forward guidance issued earlier this year, uncertainty surrounding the company's unrealized bid to acquire Warner Bros. Discovery, and the departure of co-founder and former board chairman Reed Hastings.

The stock has sold off following each of its last four earnings reports, a streak that has heightened scrutiny around Thursday's release.

Woods outlined two potential scenarios depending on how the results land. If the $70 floor gives way, he said investors should monitor the $57 level on a longer-term basis. A positive surprise, by contrast, could produce a relief rally into the low $80s — though he cautioned that traders would then need to assess whether any bounce represented a durable recovery or a temporary reprieve.

"If it breaks $70 [a share], watch $57 on a long-term basis," Woods said. "A relief rally takes us into the early $80s. Then, we see if this is … a relief rally or something more."

The earnings report arrives against a complicated competitive backdrop. A dozen state attorneys general filed a joint lawsuit Monday seeking to block Paramount's pending acquisition of Warner Bros. Discovery — the same company Netflix had been pursuing — citing concerns about harm to competition in the media industry. The outcome of that legal challenge could reshape the streaming and cable landscape in ways that affect Netflix's positioning.

Thursday's results will also land in the middle of a data-heavy week for markets. The Bureau of Labor Statistics is scheduled to release consumer price index figures on Tuesday and producer price index data on Wednesday, both of which Woods said would "really dictate where the Fed goes from here." Federal Reserve Chairman Kevin Warsh is also set to testify before Congress this week.

Earnings from Johnson & Johnson and Fifth Third Bancorp are also on the calendar, adding to the volume of market-moving events packed into a compressed window.

For Netflix specifically, the convergence of a technically fragile chart, a run of post-earnings declines, and unresolved questions about its strategic direction means Thursday's report carries weight beyond a single quarter's results. Whether the company can deliver numbers that stabilize investor sentiment — or whether the $70 level becomes a ceiling rather than a floor — stands as one of the more closely watched outcomes of the early earnings season.

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