Ever since President Trump announced his sweeping tariff plan, stocks went into a tailspin with trillions of dollars in market capitalization wiped out.
Not all stocks have fared poorly, though, as stocks with low exposure to foreign markets can sidestep the tariffs hit. Although they may fall as investors pull money out of stocks out of fear the market is overvalued and needs to reset, many remain strong, long-term winners.
Disney (DIS) and Netflix (NFLX) are examples of such stocks. Because their movies are digitally supplied, or in Disney’ case, its theme parks are located in foreign countries, they are largely free of tariff and trade constraints.
While the pandemic boom in streaming has subsided as alternative forms of entertainment reemerged, the strongest services continue to grow profitably. Only one of them, however, is worth your investment dollars in the current market environment.
Disney stands out as a compelling stock to buy during a market crash, thanks to its diversified portfolio and resilience across multiple sectors. Its streaming service, Disney+, is a key driver, boasting over 100 million subscribers and a rich content library featuring Marvel, Star Wars, and Pixar.
As economic downturns push consumers toward cost-effective home entertainment, Disney’s streaming growth offers a stable revenue stream, offsetting market volatility. The company’s aggressive investment in original content ensures it remains competitive with Netflix and Amazon (AMZN), positioning it for long-term dominance in the digital space.
Beyond streaming, Disney’s theme parks, while sensitive to economic cycles, are global icons with loyal visitors. Historical data shows attendance rebounds quickly post-downturn, supported by pent-up demand and innovative attractions.
The movie business, another pillar and the heart of Disney entertainment, thrives on blockbuster franchises that can deliver box office success, even in tough times, as audiences seek escapism. Additionally, Disney’s merchandise and licensing, which spans toys, apparel, and more, provides steady cash flow, leveraging its unmatched brand equity.
With a strong balance sheet and a history of navigating crises, Disney’s mix of innovation and tradition makes it a smart buy during a market dip, poised for recovery and growth.
Netflix is also a standout investment during a market crash, driven by its dominance in streaming and adaptability to economic shifts.
As the pioneer of subscription-based entertainment, Netflix commands over 301 million global subscribers, offering a vast, ever-expanding library of originals like Stranger Things and Squid Game.
As with Disney, consumers prioritize affordable at-home entertainment over pricier alternatives, boosting Netflix’s appeal. Its data-driven content strategy ensures high engagement, while international expansion into markets like India and Africa fuels subscriber growth, cushioning it against regional economic slumps.
Unlike competitors with diversified portfolios, Netflix’s laser focus on streaming allows it to refine its platform relentlessly by using algorithm tweaks and interactive specials like Black Mirror: Bandersnatch. This agility keeps it ahead of Disney+ and Amazon Prime.
Financially, Netflix has shifted from heavy debt reliance to positive cash flow, strengthening its resilience in volatile markets. Its stock does tend to dip during crashes, but that presents investors with a buying opportunity for a company with proven recovery power as evidenced by its post-2008 and pandemic surges.
While it lacks theme parks or merchandise, Netflix’s pure-play streaming model thrives in recessionary climates where digital consumption spikes. With a scalable business and loyal user base, Netflix is a smart pick for long-term gains amidst market chaos.
When pitting Netflix against Disney as investment options during a market crash, NFLX stock stands out as the superior choice due to its focused profitability and simpler business model.
Disney+ remains unprofitable, leaning heavily on bundling it with ESPN and Hulu to bolster its streaming segment. Netflix’ self-sustaining model avoids the cross-subsidization Disney requires, offering investors cleaner exposure to the booming digital entertainment sector.
Disney’s theme parks are also faltering as ticket prices soar making them a luxury fewer families can afford. Operating income at domestic parks fell 5% last quarter while international parks grew 28%, but it represents only 13% of the total.
And Disney lost its magic touch at the box office. Other than the rare hits like Inside Out 2 and Deadpool & Wolverine, the experience of Snow White is more common. It will lose DIS hundreds of millions of dollars and is a certified box office bomb.
This contrasts with Netflix’s affordable $18 monthly subscription for the standard tier, which aligns with recession-driven shifts toward home entertainment. Its ad-supported tier, however, is the fastest-growing business it has.
With rising park costs deterring visitors and Disney+ bleeding cash, Netflix’s profitability, scalability, and recession-friendly model make it the smarter buy for capitalizing on a market crash recovery.
