In 2024, the conversation around the profitability of streaming services and ongoing deal negotiations set a positive tone for several Hollywood conglomerates. However, by 2025, the landscape transformed as significant mega-deals emerged, causing uncertainty regarding the sustainability of profit gains in streaming. Moreover, traditional cable networks, once the backbone of profitability for the sector, faced mounting pressure amid the rise of artificial intelligence (AI), leading to broader investor concerns.
The U.S. stock market saw a significant uptick in 2025, with the S&P 500 climbing 17.5% year-over-year. Yet, the media and entertainment sector presented a mixed performance. Industry experts are now analyzing what the outlook for 2026 might entail. Prominent analyst Benjamin Swinburne from Morgan Stanley highlighted generative AI as a transformative force reshaping the entertainment landscape, impacting everything from audience behavior to IP monetization.
Additionally, Swinburne pointed to two trends shaping investor sentiment: ongoing repair within the streaming market through potential consolidation and robust growth in advertising revenues along with consumer spending on premium entertainment experiences.
Reflecting on the previous year, Fox Corp., Imax, Roku, and Spotify emerged as notable outperformers. In contrast, Netflix’s shares saw only a modest increase of 5.7%, rising from $89.13 at the end of 2024 to $94.15, as investors assessed the implications of its acquisition of Warner Bros. Discovery’s Warner Bros. division.
Warner Bros. Discovery experienced a dramatic stock surge, closing at $28.79—an increase of 172% from the prior year. Meanwhile, Paramount Skydance, in competition for WBD, saw a more subdued rise of around 29%. Conversely, Walt Disney’s stock remained relatively stable, showing only a slight increase from $110.43.
Fox Corp. was a standout performer with its stock climbing 47.3% to close at a 52-week high of $73.81, while Comcast’s fortunes were less favorable, with stocks sliding nearly 20%. On the other hand, Sony Corp. also had a commendable year, achieving a 21% increase from its opening value.
Among smaller companies, AMC Networks ended the year nearly unchanged, while Lionsgate Studios experienced a 24% rise. Starz Entertainment saw significant gains, soaring over 42% after launching as a standalone stock. TKO Group, the owner of UFC and WWE, also impressed, closing at $216.11 after a substantial increase for the year.
Cinema stocks displayed varied results; while Imax enjoyed a significant increase, Cinemark Holdings faced a decline of over 25%. AMC Theatres parent company suffered the worst, experiencing a 59% drop in stock value.
The market for live entertainment also exhibited promise, evidenced by Sphere Entertainment’s impressive 131% rise attributed to successful productions. However, the music sector faced challenges, with both Warner Music Group and Universal Music Group seeing declines in share prices throughout the year.
Streaming giant Spotify reported positive growth, closing June with a 27% increase, while iHeartMedia showed remarkable gains, nearly doubling its value over the year. Nevertheless, SiriusXM saw a decline despite securing a new deal with Howard Stern.
Gaming stocks reflected a positive trajectory, particularly Electronic Arts and Take-Two Interactive, both marking substantial increases. Other media stocks also performed well; Roku’s shares rose by nearly 50%, and Alphabet, the parent company of YouTube, surged significantly, marking it as one of the biggest winners in the sector.
As the industry transitions into 2026, the adaptability of these companies in navigating the evolving landscape shaped by AI, streaming profitability, and consumer preferences will be crucial in determining their future performance.
