Netflix and ServiceNow: A Growth Investor's Look at TAM, Scalability, and AI-Driven Upside

Netflix's growth story remains firmly rooted in the still-expanding global streaming market. The company continues to scale its subscriber base, with its third-quarter revenue hitting a record $11.5 billion and growing 17% year-over-year-the strongest surge since 2021. This momentum is driven by a disciplined strategy of expanding its content library and monetization, including the successful rollout of an ad-supported tier and a crackdown on password sharing. Management's outlook for the fourth quarter, calling for revenue growth of 17% to $11.96 billion, suggests this acceleration is sustainable.

The upcoming 10-for-1 stock split is a historical signal of management's confidence in this trajectory. While splits don't alter fundamentals, they often follow years of robust performance and serve as a catalyst. Data shows companies that enact splits generate average stock price gains of 25% in the year following the announcement, more than double the S&P 500's average. For Netflix, this move makes its shares more accessible and underscores a belief that its winning ways will continue.

Wall Street's bullish consensus reflects this confidence. With 65% of analysts rating the stock a buy or strong buy, the average price target implies about 39% upside. Jefferies analyst James Heaney takes a more aggressive stance, maintaining a $134 price target that suggests potential upside of 48%. His view is bolstered by the likelihood that Netflix's proposed acquisition of Warner Bros. Discovery assets will proceed, which could further bolster its content moat. Even amid near-term uncertainty, the setup points to a company with a clear path to capture more of the global streaming TAM.

ServiceNow: AI-Native Platform and Enterprise Workflow Dominance

ServiceNow's growth story is now inextricably linked to the enterprise AI revolution. The company is positioned at the epicenter of a massive market shift, where workflow automation is being transformed into intelligent, autonomous orchestration. The scale of this opportunity is clear: more than half (55%) of global organizations rolled out at least 100 AI use cases in 2025. This isn't a niche experiment; it's a fundamental re-engineering of how work gets done. For ServiceNow, this creates a direct path to capture a larger share of the enterprise software budget as AI moves from pilot projects to core operations.

The company's key differentiator is its AI-native architecture. Unlike point solutions that bolt AI onto legacy systems, ServiceNow has rebuilt its platform to be inherently intelligent. This design prioritizes governance and scale from the ground up, addressing a critical pain point. As the company's leadership noted, "AI at scale" is just expensive chaos without proper security and trust. ServiceNow's approach-evident in products like its AI Control Tower and Workflow Data Fabric-aims to be the safe, orchestrated backbone for enterprise AI. This focus on "governance and speed" balance is a material advantage, especially as regulations like the EU AI Act take hold. It positions ServiceNow not just as a workflow tool, but as the essential infrastructure layer for responsible AI deployment.

Wall Street's conviction in this setup is reflected in a powerful consensus. The average analyst price target stands at $224.31, implying over 53% upside from recent levels. This bullish view, held by 32 analysts, signals strong confidence that ServiceNow's AI integration will drive sustained revenue acceleration and market share gains. The setup is one of a company with a clear technological edge in a market that is rapidly expanding. The challenge for 2026 will be executing on this promise at scale, but the foundation for growth appears robust.

Growth Investor's Perspective: Comparing TAM, Scalability, and Risks

For the growth investor, the core question is which company offers a more defensible and scalable path to capturing its market. On this front, ServiceNow's AI-native platform appears to present a stronger moat than Netflix's position in the competitive streaming market.

Netflix's growth is powered by a massive, still-expanding TAM in global streaming. Its recent record revenue and 17% growth demonstrate the power of its content and monetization strategy. Yet this market is inherently competitive, with rising content costs and the persistent risk of subscriber churn. The company's foundation is solid, but its growth engine relies on continuous investment to defend its lead. In contrast, ServiceNow is building its moat around a fundamental shift in enterprise technology. Its AI-native architecture is not just an add-on; it's the core design for managing the next wave of automation. As the company's leadership notes, "AI at scale" is just expensive chaos without proper governance. ServiceNow's platform, with tools like its AI Control Tower, is being built to provide that essential structure. This focus on governance and orchestration creates a more defensible and scalable solution as AI moves from pilot projects to core operations.

The stock split catalyst, while a positive signal for both companies, is secondary for growth investors. For Netflix, the 10-for-1 split is a historical marker of past success, making shares more accessible after a decade of 690% gains. For ServiceNow, a split would similarly follow years of robust performance. The real catalyst for ServiceNow lies ahead. As we enter 2026, the enterprise is moving into the era of agentic AI, where AI agents autonomously handle multistep workflows. This shift will make governance and security paramount. ServiceNow's platform is being designed to lead in this space, turning what could be a risk into a competitive advantage. The company is positioning itself as the essential infrastructure for responsible, large-scale AI deployment.

The bottom line for growth investors is one of risk and scalability. Netflix's path is clear but faces rising costs and competition. ServiceNow's path is more complex but targets a higher-margin, more defensible layer of enterprise software. Its focus on governance for agentic AI aligns perfectly with a market need that is only beginning to crystallize. For those betting on the future of enterprise technology, ServiceNow's setup offers a more compelling and scalable moat.