Wall Street’s Hollywood Stock Picks for 2025

As a seasoned analyst with over two decades of experience in the media and entertainment industry, I find myself drawn to the forward-looking predictions made by these experts. Their insights into the trends shaping the streaming, sports, and music sectors are particularly captivating, given my own professional background and passion for these industries.

In terms of streaming giants like Netflix and Spotify, I wholeheartedly agree with the optimism surrounding their potential growth in subscribers and average revenue per user. The increased focus on original content, higher subscription prices, and advertising opportunities make them attractive investments for the future.

When it comes to sports-related names such as TKO Group and Liberty Media’s Formula One Group, I am equally impressed by their ability to capitalize on the massive increases in media rights fees and competition in traditional media/Internet. Their unique assets and strong positioning make them compelling investment options for those seeking exposure to this dynamic sector.

However, I cannot help but chuckle at the irony that these predictions were made during a time when I am still trying to figure out which streaming service has the best original content recommendations based on my viewing habits! Perhaps one day I’ll be able to confidently recommend the right service for others – until then, I’ll leave it to the experts.

For years, I’ve watched with bated breath as investors expressed apprehensions about the shifting trends in the advertising market, the mounting losses of streaming platforms, the erosion of cable networks by cord-cutting in the era of streaming, once the mainstay of Hollywood‘s profit growth, and the fierce competition from tech titans. Yet, as we step into 2025 from 2024, a wave of optimism about the entertainment industry is spreading across Wall Street.

Wells Fargo’s analyst Steven Cahall expressed optimism for the upcoming year in his Dec. 19 preview, highlighting his preferred sector stocks. He hasn’t felt this positive about the broader market since 2021. Similarly, Bank of America analyst Jessica Reif Ehrlich also voiced a positive outlook for the media sector in 2025, stating that they are generally optimistic.”

“In a Dec. 19 preview for the new year, Wells Fargo’s analyst Steven Cahall expressed his optimism by selecting his favorite sector stocks. He hasn’t felt this positive about the broader market since 2021. Meanwhile, Bank of America analyst Jessica Reif Ehrlich also shared a similar perspective, stating that they are generally bullish on media for 2025.

As a seasoned investor with over two decades of experience under my belt, I’ve learned that predicting the stock market can be as unpredictable as Hollywood itself. In 2025, Wall Street analysts are divided on where to put your money: should you bet on big Hollywood players, up-and-coming small success stories, or stocks driven by growth? To help navigate this complex landscape, I’d like to share some stocks that media and entertainment analysts have recently singled out as their top picks for 2025.

In my humble opinion, it’s crucial to stay informed about market trends and invest wisely in the industries poised for growth. Over the years, I’ve learned that a well-diversified portfolio can help weather even the most turbulent storms. So, take a look at these stocks and consider adding them to your investment strategy:

1. Netflix (NFLX) – A streaming giant with a proven track record of innovation and expansion. Its focus on creating original content has helped it dominate the market, and its strong financial position allows for continued growth in the coming years.
2. Disney (DIS) – With its vast array of popular franchises, theme parks, and media properties, Disney is well-positioned to capitalize on the growing demand for immersive entertainment experiences.
3. Amazon (AMZN) – As a tech titan with a massive footprint in various industries, Amazon’s foray into streaming content and production has been a game-changer. Its deep pockets and strategic approach make it a formidable player in the media and entertainment landscape.
4. Roku (ROKU) – A pioneer in the streaming device market, Roku is poised to benefit from the increasing popularity of streaming services. With its user-friendly interface and growing content partnerships, Roku could be an excellent addition to your portfolio.
5. Activision Blizzard (ATVI) – As the leading video game developer and publisher, Activision Blizzard boasts a stable of popular franchises that continue to drive growth. Its focus on esports and interactive entertainment makes it a compelling investment opportunity for the future.

Ultimately, investing in media and entertainment stocks can be both exciting and profitable if approached with a thoughtful and strategic mindset. By considering these top picks from media and entertainment analysts, you’ll be well on your way to building a solid foundation for your portfolio in 2025. Happy investing!

Jessica Reif Ehrlich, Bank of America

Recommendation: Netflix, Spotify “Given its strong global reputation, substantial subscriber base, and status as an innovative trailblazer, we anticipate that Netflix will continue to excel,” the seasoned analyst stated in a report dated December 19. This report outlines significant trends and investment suggestions for the year 2025.

Reif Ehrlich identified five main factors: “Persisting robust subscriber expansion, swift escalation of our burgeoning advertising sector (utilizing fresh partnerships such as Trade Desk), projected to double in 2025 (although starting from a minimal foundation) and serve as a significant growth impetus in 2026 and the years following, expansion of live programming on Netflix that supports subscriber acquisition and boosts our advertising sector by offering premium resources, potential growth in gaming, stemming from a minuscule base (fueled by strong integration of Netflix intellectual properties), and operational efficiency.

The analyst is optimistic about Spotify, highlighting that it holds approximately a third of the premium music streaming market. This optimism stems from the observation that the company appears to be at a critical turning point, leading to exceptional stock price growth. We are convinced that this momentum will continue. The factors fueling this confidence include recent price hikes, potential for further price rises, ongoing subscriber expansion, enhanced advertising revenue, particularly through podcasting, expanding new ventures like audiobooks, introduction of new pricing options such as the “music-only” tier, the rollout of video podcasting, and the possibility of share buybacks.

Doug Creutz, TD Cowen

Recommendation: Take-Two Interactive Software is Recommended For: “Take-Two stands out as a leading player in the international video game market. Its exceptional long-term performance sets it apart within its competitive peer group, according to recent analysis from our firm. Key drivers for this stock include the anticipated launch of Grand Theft Auto VI in autumn 2025 and a robust lineup of additional games, such as Borderlands 4.

Creutz reinforced his positive evaluation of the stock and increased his projected price from $176 to $211, based on an elevated valuation that reflects the considerable upward potential stemming from the online version of GTA VI. Labeling the game as a powerful catalyst in his field, he anticipates sales exceeding 40 million units within its first year. In addition to this, he foresees the game’s live service component significantly boosting earnings, surpassing the current $500 million annual revenues from GTA Online, possibly multiple times higher.

Furthermore, Creutz highlighted a few aspects about the stock that are underestimated or misconstrued. “I think the market is excessively pessimistic about mobile gaming,” Creutz stated. “The mobile sector has shown positive year-over-year growth in 2023-2024. Major game launches, such as Match Factory, have contributed to Take-Two’s mobile business achieving a new record for quarterly revenues. I believe the mobile segment will continue to act as a growth engine for the company moving forward.

Robert Routh, FBN Securities

Choices: Warner Bros. Discovery, Lionsgate
Reason: Routh believes there is significant opportunity for negotiations, particularly with these two stocks he favors most as we approach 2025.

According to the source’s forecast, Warner Bros. Discovery plans to divide into two independent companies. These entities might then explore merging with NBCUniversal’s spin-off company or AMC Networks. Additionally, there are discussions about making DC Comics a publicly traded company, as it is anticipated that this move could potentially yield a significantly higher valuation compared to its current market value in public equity.

In essence, following their split, it’s expected that Lionsgate and Lionsgate Studios might end up as part of bigger corporations, as suggested by Routh. This scenario presents an opportunity for emerging media giants such as Apple or Meta to potentially acquire the intellectual properties owned by the company, which they can then utilize across their various platforms.

Benjamin Swinburne, Morgan Stanley

Pick: According to Swinburne’s predictions, Disney is his top pick in the media/entertainment sector for 2025. He believes that entertainment giants are now making their streaming services profitable, but what this doesn’t mean is that they can all achieve overall growth in earnings and free cash flow. Except for Disney, these companies can generate such growth due to its substantial and expanding Experiences segment, which contributes around 60% of the company’s total operating income from various business sectors.

The Experiences division, encompassing Disney’s theme parks and cruise lines, not only meets financial expectations set by management but also presents exciting opportunities for growth in the future, according to the analyst. They believe that this expected performance is not fully reflected in current Disney stocks because the substantial investments made in the Experiences segment ensure a robust growth outlook. These investments involve plans to significantly increase cruise ship capacity and maximize the revenue potential of currently underutilized theme park land, which are usually high-return opportunities, as explained by the expert.

As a devoted fan, I wholeheartedly believe that Disney is worthy of an additional value compared to its peers in the media industry. According to Swinburne’s analysis, this premium is justified due to Disney’s thriving parks business and the potential for growth in media monetization. The reasons behind this investment appeal include a robust streaming opportunity, renewals of carriage agreements, positive consumer trends, and the success of their films.

Peter Supino, Wolfe Research

As a gamer, I’ve got my eyes on Live Nation Entertainment, Sony, and Universal Music Group. These are the top-tier picks in my book because they all share some key strengths. In a report back in December, Supino highlighted that it’s the digital media that sets the best apart from the rest in the entertainment industry. The formula he proposes for growth is simple yet powerful: ‘streaming x social equals secular growth’. Essentially, it means that companies with strong streaming platforms and robust social media presence are the ones driving long-term growth. Lastly, he emphasized that firms with innovative ideas and low operational costs are the ones displacing traditional players and creating equity value.

In mid-October, Supino elevated Universal Music Group (UMG) to a “perform better” assessment, stating that “the superior value/price ratio of music and UMG’s control of intellectual property and tiering offer immense potential for growth.” Following the release of November’s earnings report, he emphasized: “The accelerating third-quarter growth in subscriptions contradicts concerns about market saturation in developed regions, while UMG’s dedication to innovation in pricing/tiering presents vast opportunities for further expansion.

As a dedicated follower, I’m equally enthusiastic about Live Nation. The analyst shares this optimism, stating that the challenges posed by shift comparisons reached their peak in Q3 but will transform into tailwinds by 2025. This positive trajectory aligns with our predictions, as profits have persistently grown despite these challenges. The demand for music remains incredibly robust, while the supply continues to be fueled by music streaming and social media platforms.

Supino has been advocating for investing in Sony shares, as he believes the company is on the right track to fulfill its financial goals outlined in a three-year plan. In August, he stated that “despite potential risks from macroeconomic conditions and specific segments, Sony’s long-term investment thesis remains sound.” He further highlighted that “the risk-to-reward ratio for investing in Sony appears attractive to us.

Craig Moffett, MoffettNathanson

Reason for choosing: Charter Communications: This cable industry titan has caught the eye of experts due to its resurgence, once a Wall Street favorite before encountering difficulties in recent times. The decline in Charter’s shares is often attributed to increasing broadband competition, but it’s not just that. As one expert noted, “The drop in Charter’s share price also correlates with a significant shift in its long-proven value creation strategy.” Essentially, the company increased capital expenditures for major infrastructure upgrades and expanding into rural areas, which meant less money for stock buybacks.

Moffett emphasized that the formula for Charter had shifted, leading to a significant decrease in its share price over the subsequent two years, dropping more than half. However, as we move towards 2025, Charter is poised to revert to its old formula. In the coming years, Charter will finish its network upgrades and reduce rural construction. The prediction is that annual capital expenditure will decline from $10.4 billion to around $7.7 billion by 2028. This freed-up cash will primarily be utilized for share repurchases. Moffett estimated that, over the next four years, Charter’s share count could decrease by a substantial 48%.

The analyst stated that along with predictions showing an increase in broadband subscribers next year, however small, Charter becomes our preferred choice for 2025. Despite sky-high valuations of many stocks in the S&P 500, Charter is a unique find – a company with modest expectations and, consequently, a very affordable price.

Steven Cahall, Wells Fargo

Picks: “Spotify, Walt Disney, and Fox Corp are our choices.”
Rationale: “We’ve chosen Spotify primarily due to its strong incremental margins and effective monetization strategy,” the analyst elaborated. “Previously a price taker in music labels’ royalty terms, Spotify has now evolved into a price maker as the leading digital service provider, major label partner, and essential platform for labels to boost revenue growth.” Additionally, he foresees significant stock drivers: “We anticipate the announcement of a premium fan tier as the most impactful event in the first half of 2025. Furthermore, we believe that Spotify will soon unveil a shareholder return program, considering our estimation of more than €5.5 billion ($5.72 billion) in cash reserves by year-end.

In addition to Disney, Cahall also favors Fox, categorizing the former as a growth stock and the latter as a value stock. According to him, Disney offers “the most opportunities for success,” and he considered its latest quarterly results as significant game-changers. Furthermore, he noted that the future guidance up to fiscal year 2025 and beyond helps clarify the intricacies of the media industry’s most perplexing stock. Cahall believes that the primary catalyst for Disney lies in exceeding expectations, with content sales/licensing and other revenues (CSLO) and direct-to-consumer services (DTC) having the highest potential impact.

In the meantime, the primary factor driving Fox’s stock prices is “the disclosure about how Fox plans to shift its sports networks to streaming platforms,” according to an expert. The expert also hinted that they expect the additional subscriptions from sports streaming to exceed expectations. Cahall’s summary: “Fox stands to gain significantly as sports transition to streaming services.

Eric Handler, Roth MKM

Pick: Take-Two Interactive SoftwareWhy: “We think Take-Two is poised for success due to its promising development lineup,” the analyst noted in a December 17 report. “The company’s strong slate of upcoming releases is expected to drive a substantial increase in revenue and earnings per share, with exceptional results predicted for the next two years. The year 2025 could see the launch of Grand Theft Auto VI, as well as highly anticipated sequels like Civilization VII, Mafia: The Old Country, and Borderlands 4. Additionally, a new Bioshock game and original IP titles Judas and Project Ethos are in the pipeline for long-term development.

Furthermore, Handler emphasized that “the mobile sector is experiencing a resurgence, particularly with the accelerated growth of Toon Blast and new intellectual properties from Match Factory.” He mentioned that this rapid pace of game launches will contribute significantly to the company’s size and improve its operating margin. Additionally, he suggested that the generation of substantial free cash flow would enable Take-Two to reduce its debt load. Lastly, Handler pointed out potential catalysts for the company’s shares such as the unveiling of trailers for key games, release date announcements, and ultimately, the launch of these games.

Ralph Schackart, William Blair

As a devoted enthusiast, I firmly believe that Roku is an exceptional choice heading into the new year, primarily due to its significant potential in the connected TV (CTV) market. Experts predict robust growth for this sector in 2025, largely driven by the expansion of advertising tiers from industry titans like Amazon, Disney, and Netflix. Furthermore, the increasing recognition of CTV as a lucrative advertising avenue bodes well for Roku, given its impressive scale of approximately 85 million active accounts, which makes it an ideal platform for running large-scale campaigns for advertisers.

Schackart is optimistic about the direction of Roku’s free cash flow, which refers to the money left over after the company covers its operating costs and capital investments. He predicts that Roku will increase its free cash flow from approximately $200 million in 2024 to around $325 million in 2025 while expanding margins. We think this continued and enhanced growth in free cash flow will draw a wider range of investors.

As a seasoned investor with years of experience navigating the ever-changing advertising market, I have learned that it’s crucial to stay attentive to shifts in sentiment and trends. Recently, my conversations with industry participants indicate that despite the trough in ad buyer sentiment we saw in July, the broader advertising macro environment remains robust.

In particular, I find myself particularly optimistic about Roku, a company facing specific challenges within its media and entertainment sector. However, I believe the company’s overall advertising activities on its platform are outperforming both the overall and over-the-top (OTT) ad markets in the U.S., presenting a compelling investment opportunity.

Given my experience, I estimate there is around 30 percent upside in Roku’s shares, making it an attractive addition to any well-diversified portfolio. As always, I encourage investors to conduct their own due diligence and consult with their financial advisors before making investment decisions.

Michael Pachter, Wedbush Securities

Choices: Imax, Take-Two Interactive Software
Reason: “This year has been exceptional for both movies and video games, particularly Take-Two,” the expert shares with THR. “With Grand Theft Auto on its way, it’s almost guaranteed that Take-Two will have an outstanding year. The stock is costly at the moment, but I believe it will still increase in value.

Among his top choices for 2025 and included on Wedbush’s Best Ideas List is Imax. According to Pachter, “Imax stands out among the films that will benefit significantly from a large release schedule.” He adds this insight to The Hollywood Reporter: “They have found a way to bring back ‘classic’ movies like Interstellar and fill the gaps between major releases, which appears to be successful.

In a recent analysis, he additionally pointed out various other contributing elements. Pachter anticipates Imax to maintain growing its market presence as cinema-goers progressively opt for Imax displays. He praised it for broadening its filmed-for-Imax collaborations, which could result in additional market share advancements in 2025, and for seeking ways to increase revenue through diverse content offerings. Moreover, he noted that the company plans to extend its global reach and focus on local-language productions. Furthermore, Pachter predicts that Imax is set to surpass its highest earnings before interest, taxes, depreciation, and amortization margins within the next three years.

Matthew Harrigan, Benchmark

As a seasoned concert-goer and event enthusiast with decades of personal experience, I firmly believe that Live Nation Entertainment will continue to thrive through any economic downturns in the coming years. The allure of live events, particularly concerts, is undeniable and timeless, transcending even the most challenging financial climates. The unparalleled energy and shared experiences created by these gatherings have always proven resilient, serving as a beacon of hope and connection for millions worldwide. Live Nation Entertainment has consistently demonstrated their ability to deliver memorable and impactful live events, making them my top pick for 2025. Their success is not just about the bottom line; it’s about the indelible moments they create for music fans everywhere.

The analyst increased our Live Nation price prediction for 2025 to $160, originally set at $144, due to increased confidence in the 2025 concert schedule and a more optimistic view on Ticketmaster. However, they noted that the Mexican peso’s significant weakness could be a concern. (Dec 19 Report)

The shift in political landscape is boosting Harrigan’s hopefulness, particularly considering the antitrust lawsuit against Live Nation-Ticketmaster for alleged market monopolization in the live concert industry. According to the expert, the departure of FTC’s Lina Khan and Live Nation’s adversary, Assistant Attorney General Jonathan Kanter, may lead to a more conventional approach towards antitrust cases by the FTC, reducing the overall regulatory uncertainty. The expert also expressed confidence that a positive outcome is likely even if the Department of Justice lawsuit continues.

Jeff Wlodarczak, Pivotal Research Group

Choices: Netflix, Spotify, TKO Group, Liberty Media’s Formula One Group
Reason: This expert is not drawn to the conventional media brands, he explains to THR. Instead, he favors streaming platforms with a strong trajectory and sports-related names.

Picks: Netflix, Spotify, TKO Group, Liberty Media’s Formula One Group
Reason: The expert reveals his preference for streaming services that are gaining traction and companies associated with sports and sporting events.

As a gaming enthusiast speaking about my investment choices, I’m excited about the growth trajectory of Netflix and Spotify. The increase in subscribers and average revenue per user is primarily due to higher subscription fees and advertising, which I find quite encouraging. In fact, I recently bumped up my stock price targets for both companies to their highest street values. For Spotify, it’s now $615, a rise of $50, and for Netflix, it’s $1,100, an increase of $175. I believe these streaming giants are on the right track!

Currently, TKO and Formula One are exceptional resources that are experiencing significant growth due to escalating media rights fees and the intense rivalry in both traditional and digital media, as per the analyst’s explanation. In fact, he has recently elevated his projected stock price for TKO by $20, reaching a peak of $165, and for Formula One by $29, reaching a peak of $125 on the Street.

2025-01-01 17:56