After surging to $315 on Monday, Netflix, Inc. (NFLX) is at it again, closing near its highs Tuesday, up 3.25% to another closing record of $325.22. 

What's driving the rally? At this point it only appears to be momentum. Netflix stock is up an absurd 68.8% this year alone. Over the last 12 months, its stock price has soared more than 134%. With the recent move, Netflix stock now boasts a pretty remarkable market cap, sporting a total valuation of $140.4 billion.

In a day and age where companies like Apple Inc. (AAPL) are knocking on the $1 trillion door, $140 billion may not seem like that much. But consider it against some of the world's other largest media companies.

Netflix's $140 billion market cap is above Twenty-First Century Fox Inc. (FOX) (FOXA) at $69 billion, Charter Communications Inc. (CHTR) at $83 billion and even Sony Corporation (SNE) at $64 billion.

It barely lags media conglomerates like Walt Disney Co. (DIS) and Comcast Corporation (CMCSA) , which have market caps of $157 billion and $170 billion, respectively.

At this rate, though, Netflix will pass them in market cap over the next few weeks.

It again circles back to the question of, what's driving the stock higher? Last year Netflix increased domestic subscriptions by $1 per month. That would equate to about $55 million in additional revenue per month. These increases are vital to Netflix because of its ballooning content budget.

Disney who?
Disney who?

Because it costs Netflix so much money to license content from other producers, it's now bringing production in-house. This means paying big bucks for talk show hosts and comedians to move onto its platform or bringing in big-name producers and actors for TV series and movies.

This year, Netflix management said it plans to spend up to $8 billion in content. $8 billion.

That may not seem like an insane amount of money at first glance, but consider that current analyst estimates call for revenue of "just" $15.8 billion this year. In other words, we're talking about a content budget that's roughly 50% of revenue. That's before any of the company's other costs are calculated.

And yet, investors continue to bid up the stock knowing this. I think it's because, like Amazon.com, Inc. (AMZN) a few years ago , investors know that down the road Netflix will be the platform of choice. While cable and satellite can survive, Netflix still has 118 million subscribers around the world. There's no reason that won't go to 150 million, then 200 million and higher.

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Because of Netflix's low price point, consumers are drawn to the platform. It's a reasonable expense in a recession and a thoughtless splurge when times are good. As consumers continue to join and Netflix -- which proved a price hike wouldn't hurt subscription numbers -- slowly ratchets up the price, it can add billions to its top line by a simple price change.

In other words, it may not be worth $140 billion today because of its financials. But investors see where this is headed five or ten years down the road. Although, all of this comes at a price. Shares trade at more than 9 times this year's expected revenue. The company's trailing free-cash flow stands at an almost $2 billion deficit and that will widen in 2018. 

All the other companies above -- Disney, Fox, Charter and Comcast -- generate billions of dollars in free cash flow. That's not to say Netflix is terrible by any means. After all, it's the one that's disrupting the space. But it does come at a price.

The news has been good this year for Netflix, but good enough to warrant a near-70% gain to its already hot-stock? I don't know about that.

This article is commentary by an independent contributor. At the time of publication, the author had no positions in the stocks mentioned.

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