Buy the dip? Mark Cuban is going long on Netflix.
The investor announced via Twitter Friday that he planned to buy the stock because of its low valuation. Cuban forecast that the company could become a target of a bigger media conglomerate.
Cuban currently owns more than 50,000 shares of the Internet stock and he said his plan is to "never sell it" as he sees unstoppable growth ahead.
"Relative to other media companies ... it's just so far undervalued," Cuban said on CNBC's "Halftime Report" Friday.
For any of the major tech companies that have large market caps it's a no-brainer, he said, pointing to Google, Apple, Facebook and Verizon as examples.
Shares edged up from a session low of $341.50 after the announcement, but were still down around 2 percent.
Netflix reported earnings that were in line with Wall Street estimates, but shares plunged more than 25 percent as subscriber growth figures came in lower than expected.
Cuban is not worried about the firm's subpar subscriber growth figures. The results did not disappoint and everybody has had a disappointing growth number at some point, he said.
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Netflix, which brands itself as "the world's leading Internet provider," has caused Hollywood movie-makers to rethink their traditional release models.
However, the company is facing more competition as traditional media providers like HBO and CBS look to enter the space and more Americans move toward cord cutting, canceling their pay-TV subscriptions.
"Netflix is the fulcrum for content in the country, if not the world, right now. ... It's almost as if these other companies are going to be helping Netflix with their marketing," Cuban said. "You look at the competitors coming in and that's the best thing that could possibly happen."
S&P Capital IQ Analyst Tuna Amobi has a hold recommendation on the stock and says that he sees long-term growth for the company. However, he said there are concerns surrounding Netflix's domestic user growth, mainly because of higher prices, but he doesn't expect that to have a lasting impact.
"We've had a hold recommendation on Netflix for last few months as shares were factoring in rosy expectations for subscriber growth," Amobi said. He has a $450 price target on the stock.