CNBC's Jim Cramer on Wednesday sorted out what he would advise investors to do with shares of Netflix , one day after the video streaming giant beat estimates on subscriber growth but missed on earnings. "I love streaming, but I also don't see a reason why I've got to run out and buy the stock," Cramer said on "Squawk Box." "That's not good enough." However, he said he doesn't have a reason to sell the stock, either. The "Mad Money" host suggested that investors who already own Netflix to hold it, even as the stock fell more than 4% to around $508 on Wednesday. Netflix's global paid net subscriber additions slowed to 1.54 million in the second quarter compared with analyst projections of 1.19 million, according to Street Account. While earnings of $2.97 per share were below forecasts, net income grew nearly 90% from the year-ago period to $1.35 billion. Revenue rose close to 20% year over year to $7.34 billion, slightly topping expectations. Netflix's saw strong subscriber growth during the early months of the coronavirus pandemic , and the company's chief financial officer, Spencer Neumann, acknowledged during Tuesday's earnings call "a bit of choppiness to our growth" in recent quarters, according to a FactSet transcript. "We had the kind of big pull-forward in 2020 of subscriber adds. We also had the push in production of some of our kind of key returning titles and big tentpole new releases until the latter part of the year. But overall, the business is performing well," Neumann said. However, Cramer said he harbored some concerns about the trajectory of Netflix's growth at this point in its maturation process, saying "you don't want to hear" that some subscriber adds were pulled through. "If you take a look at where they're gaining, it's in areas where they're in Covid. They mentioned Brazil. They mentioned India. Well, I want a smoothed out growth story. So, I come away and I say, you want smoothed out growth? Well, you're going to have to go to Chipotle ," Cramer said, referring to the fast-casual chain that also reported earnings Tuesday evening. "You have to go [semiconductor supplier ASML ]. You've got to go UnitedHealth yesterday or Anthem today. You can't go to pseudo growth," he advised. In late April, Cramer reacted to Netflix's first-quarter results by saying investors should feel comfortable buying the stock if it fell to $490 . It did dip to that level in mid-May and then again in early June. The stock hit an all-time high of $593.29 on Jan. 20. Cramer also said in April that he thought Netflix could overcome disappointing subscriber growth in the first period, thanks to the strength of its upcoming content releases. He mentioned the lineup of new shows again Wednesday. "You're betting on a second-half great slate for Netflix," Cramer said, as he tried to distinguish between companies that investors "really want to buy and companies that you might want to own." It's not that Netflix will stop growing, Cramer said, noting the opportunity in international markets. But he said there's real competition now from Disney + and other streaming services such as HBO Max, which would go with the rest of the AT & T -owned WarnerMedia assets that will be merged with Discovery in a deal expected to close in the middle of next year . "I think the competition, which I have been pooh-poohing, has finally caught up," Cramer said, contending Netflix's dominant position in the streaming landscape is similar to Amazon Web Services in cloud computing, where rival offerings from Alphabet 's Google Cloud and Microsoft 's Azure have become real players. "I'm just trying to explain why [Netflix] is a hold, not a buy," Cramer said. Disclaimer Disclosure: Cramer's charitable trust owns shares of Amazon, Google-parent Alphabet and Microsoft.
In this photo illustration the Netflix logo is seen displayed on a smartphone.
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