The Los Gatos, Calif., company was climbing 3.28% to $540.27 in trading Tuesday.
Analyst Joseph Bonner said in a note to investors that "Netflix has risen from an ancillary business to which Hollywood would often unload rights for library content to become an industry powerhouse in its own right."
"It is now competing with the traditional Hollywood studios for viewers and top industry talent, and, in essence, driving the future of entertainment," said Bonner, who has a $650 price target on the stock.
Netflix is dominating the 2021 Academy Award nominations, including 10 for "Mank," a biographical drama about screenwriter Herman J. Mankiewicz.
"Netflix recognized early on that viewers were moving to digital platforms and that digital was moving to mobile," Bonner said. "Netflix was the first mover in this digital shift, introducing streaming video in 2007."
The COVID-19 pandemic, the analyst said, forced audiences to stay at home and further accelerated the trend toward digital streaming video.
"Investors should be aware that NFLX shares could be a bumpy ride," Bonner said. "First among these is the possible pull-forward of subscriber additions into 2020 from 1H21, which may have been a factor in the recent NFLX selloff."
Short-form streaming video from the likes of Google parent Alphabet's (GOOGL) - Get Report YouTube, Facebook (FB) - Get Report, and other digital social media services provides "provides another strong competitive vector for Netflix," the analyst said.
Netflix recently began forbidding viewers from using passwords from households to which they don't belong, sparking anger across social media.
"Netflix is walking a fine line here, which may be the reason that the warning is just a limited test and has not previously been contemplated by management," Bonner said. "On the one hand, getting those who share account logins who are not members of the same household, i.e., pirates, to sign up for new accounts would boost subscribers and revenue."
Last week, Netflix was among the companies Morgan Stanley listed in the firm's 30 for 2023 report, which focuses on "quality stocks for a long-term holding period."