Netflix vs Alphabet: Which Growth Stock Offers Superior Long-Term Performance?

When evaluating growth stocks for a 10-year investment horizon, the critical question isn’t just about short-term momentum—it’s about durability, business resilience, and sustainable expansion. Two companies that exemplify these qualities are Netflix and Alphabet, both commanding dominant positions in their respective markets and showing impressive trajectory in their latest financial results.

But what separates these two growth stocks in terms of investment potential? Each operates a different playbook for expansion, and understanding their distinct strengths—and weaknesses—is essential for making an informed decision.

Netflix’s Streaming Powerhouse and the Emerging Ad Business

Netflix has carved out a unique position as a focused growth story. With over 325 million subscribers across 190+ countries, the company’s streaming service generates the vast majority of its revenue. Yet what makes Netflix particularly compelling is the acceleration happening right now.

In the most recent quarter, Netflix’s revenue climbed 17.6% year-over-year, exceeding its Q3 performance of 17.2% and outdistancing its full-year 2024 growth rate of 16%. This acceleration suggests the company hasn’t matured as much as some skeptics believe.

But here’s where it gets genuinely interesting: Netflix’s profit margins are expanding in tandem with revenue growth. The company achieved an operating margin of 26.7% in 2024, which expanded further to 29.5% in 2025. Management is projecting this to reach 31.5% by 2026—meaning Netflix is growing faster while simultaneously becoming more efficient at converting revenue to profit.

The second growth engine gaining momentum is Netflix’s advertising business. After doubling in size during 2025 to surpass $1.5 billion in revenue (representing 3.3% of total revenue), management expects this segment to roughly double again in 2026. While still relatively small in the overall revenue mix, this fast-growing business segment represents a meaningful future catalyst for the streaming giant.

Alphabet’s Multifaceted Growth Engine

Alphabet operates from a fundamentally different strategic position. The company’s 16% year-over-year revenue growth in its most recent quarter reflects broad-based expansion across multiple business units—a characteristic that distinguishes it from Netflix’s more concentrated approach.

Alphabet’s Google Services segment, which encompasses search advertising, YouTube ads, Google Network revenue, and subscription services, grew 14% in the latest quarter. This steady, double-digit growth from the company’s largest and most mature business demonstrates the enduring strength of digital advertising.

Yet the true standout performer is Google Cloud, Alphabet’s cloud computing division. This segment surged 34% year-over-year in the latest quarter and has now grown to represent 15% of total company revenue. More impressively, the cloud division’s operating income more than doubled, jumping 85% year-over-year to $3.6 billion. This reveals a business within a business that’s achieving both explosive growth and rapidly expanding profitability.

The diversification across search, YouTube, subscriptions, and cloud computing creates multiple growth vectors—each capable of delivering double-digit returns. This portfolio approach contrasts sharply with Netflix’s more streamlined business model.

Comparing the Growth Stock Profiles

From a valuation perspective, these two growth stocks look remarkably similar, with Netflix and Alphabet trading at price-to-earnings ratios of 34 and 33, respectively. So the decision shouldn’t hinge on valuation multiples.

What it should hinge on is growth quality and business composition. Alphabet benefits from multiple expanding segments with nearly universal double-digit growth, whereas Netflix relies more heavily on its streaming subscription base with advertising as an emerging supplement. Additionally, Alphabet’s cloud business is expanding its operating margins even as it accelerates revenue growth—a sign of operational excellence and scaling efficiency.

Netflix does counter with its own compelling narrative: expanding operating margins in the core business and a potentially transformational advertising opportunity ahead. However, these advantages must be weighed against a significant headwind.

The Acquisition Elephant in the Room

Netflix has announced a major acquisition of Warner Bros. Discovery’s premium content assets, including HBO Max and the Warner Bros. film studios, valued at $82.7 billion. This represents approximately 23% of Netflix’s current market capitalization and remains subject to regulatory approval.

While such transformational deals can unlock synergies and create value, they simultaneously introduce execution risk. Integrating a complex media studio operation, managing regulatory scrutiny, and maintaining customer experience during a transition period all carry substantial downside potential. This represents a meaningful risk factor that Alphabet simply doesn’t face—Alphabet’s growth is organic and doesn’t depend on successful completion of a massive acquisition.

The Verdict on These Growth Stocks

For investors seeking the more straightforward path to long-term growth, Alphabet presents the clearer investment case. The company’s diversified growth portfolio, multiple expanding business segments, and cloud computing juggernaut create a lower-risk profile than Netflix despite similar valuation multiples.

Netflix’s story remains compelling—the operating margin expansion and advertising business acceleration are genuinely noteworthy. But the pending acquisition introduces a variable that Alphabet doesn’t have to manage, and in evaluating growth stocks over a decade-long timeframe, simplicity and diversification typically outperform concentration and complexity.

The best growth stock choice depends on your risk tolerance, but for those seeking both growth and stability, Alphabet’s multifaceted expansion story offers a more compelling long-term opportunity.