Paramount skydance shares jump 5.5% as streaming investments boost investor confidence

Shares of Paramount Skydance rose 5.5% after the newly merged media company unveiled cost-cutting measures and plans to invest $1.5 billion in its streaming and studio divisions, signaling strong investor confidence in its digital transformation strategy.

The company's first results since the merger provided an early glimpse into the financial impact of CEO David Ellison's overhaul, aimed at turning Paramount into a leading player in digital media. Paramount Skydance also raised its savings target to at least $3 billion and announced the reduction of 1,600 jobs in Argentina and Chile, in addition to earlier layoffs and voluntary exits. Analysts noted that while the strategic moves could generate significant long-term value, near-term cash outflows and transformation costs—including a $500 million Q4 restructuring charge and $800 million of one-time investments for 2026—pose short-term financial risks.

Paramount Skydance is pursuing revenue growth through content deals, including a Timothée Chalamet-led film, a five-year agreement with the creators of South Park, and a partnership with Activision to bring Call of Duty to theaters. The company is also exploring a potential acquisition of Warner Bros Discovery, with management projecting the initiatives could help drive $30 billion in revenue by 2026.

With shares up nearly 46% this year, the stock trades at a forward price-to-earnings ratio of 14.58, below peers such as Walt Disney at 16.96 and well under Netflix at 35.23, reflecting investor optimism about its cost discipline and growth potential in streaming and theatrical entertainment.