Streaming giant Netflix's latest quarterly report for the second quarter shows strong performance, but the market reaction was unexpected. Despite revenue and profit exceeding expectations, the company's stock price fell more than 4% after the earnings report was released.

Netflix's revenue for the second quarter reached $11.08 billion, a year-on-year increase of 17.3%, slightly higher than the company's previous estimate of $11.04 billion. The earnings per share (EPS) was $7.19, not only exceeding analysts' expectations of $7.03 but also significantly higher than last year's $4.88.

Based on strong performance, Netflix raised its full-year revenue forecast for 2025, increasing it from the previous $43.5 to $44.5 billion to a range of $44.8 to $45.2 billion. The company stated that this adjustment primarily reflects the impact of a weaker dollar, user growth, and the continued growth of its advertising business.

However, despite the impressive financial report, the reaction from investors has been lukewarm. William Blair analyst Ralph Schackart pointed out that while Netflix's performance is excellent, it is difficult to exceed the high expectations that the market has already established. In fact, Netflix's stock price has accumulated a rise of over 42% this year, with a price-to-earnings ratio of about 40 times, far exceeding the market average.

The pressure brought about by this high valuation may be the main reason for the fall in stock prices. Investors seem to be concerned that even outstanding financial report performance may be difficult to support the company's current high valuation. In addition, market concerns about Netflix's future growth potential may also affect investor sentiment.

It is worth noting that the recent rumors circulating online about the poor reputation of the third season of "Squid Game" may have affected investor confidence to some extent. However, the actual impact of this factor remains to be observed further.

Overall, Netflix's financial report highlights the company's continued advantages in the streaming market, but also underscores the growth pressures faced by highly valued companies. In the future, how Netflix will maintain growth while meeting high market expectations will be a significant challenge for the company.