Netflix's Problem Isn't Profits. It's Viewing Time.

The stock market is near an all-time high, driven by a technology boom in artificial intelligence (AI). A prior leader of the technology boom -- Netflix (NASDAQ: NFLX) -- keeps slipping into one of its worst drawdowns ever.

Shares of Netflix are now down 54% from their highs, despite posting strong revenue growth and record profit margins in its recent quarterly earnings. So what is the problem for investors? Two words: eyeball share. Here's why viewing time is a potential problem, and what Netflix plans to do about it.

Looking at the headline financials, you could not find anything to complain about with Netflix's Q3 earnings results. Revenue grew 12% year over year to $12.9 billion, operating margin was a record at 34.6%, and management repurchased $4.8 billion worth of stock in the quarter with excess cash flow. This is the recipe for strong stock returns over the long haul.

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