Netflix (NASDAQ: NFLX) shares dropped 8% following its second-quarter earnings report on July 16, even as the streaming giant tracks toward its most profitable year on record.

The company deployed nearly $5 billion on stock repurchases during the quarter, the largest buyback activity in its history, and management reloaded its authorization to $27 billion.

Despite the aggressive capital return program, investor sentiment has cooled sharply, with the stock down nearly 50% from last year’s high amid a significant valuation rerating.

Concerns about softening user engagement have compounded the pressure, as Netflix faces rising competition from short-form video platforms, podcasts, gaming services, and rival streaming…