Netflix (NFLX) shares dropped 10% due to disappointing third-quarter earnings related to a Brazilian tax issue. Revenue met expectations, but earnings per share fell short at $5.87. Despite this, buying the post-earnings dip could be strategic as AI presents a significant opportunity for the company, with potential upside of 35%.

Options data suggests further upside in NFLX shares, with contracts indicating potential growth to $1,231 by Jan. 16. Positive sentiment is also fueled by margin outperformance, improving engagement trends, and the company’s ad business expected to double by 2025. Wall Street remains bullish, with a consensus rating of “Moderate Buy” and a mean target price of $1,339.

Read more at Barchart: Netflix Stock Flopped on Earnings. Barchart Options Data Tells Us NFLX Could Be Headed Here Next.