Cramer: Netflix Just Reaffirmed It Can 'Grow And Grow And Grow'

Netflix, Inc. NFLX investors were in a good mood Tuesday, as the stock soared 13 percent and hit a new all-time high of $185 after the company reported its second-quarter results. But the stock's momentum is likely to continue moving forward as the company is led by a strong CEO Reed Hastings who has perfected the three keys to success.

Hastings fully understands that content is king, people love good deals, and money managers will invest in internet stocks that show promise,  Jim Cramer explained during his "Mad Money" show on Wednesday.

Netflix is able to produce content that is loved by subscribers across the globe, Cramer said. What works in the South Korean market is also working in Brazil and at home -- and all for a low price of $8 or €8. With this focus on content there is little doubt that Netflix will "grow and grow and grow."

But Netflix's success wouldn't be possible without the support of money managers, Cramer continued. To attract their attention, Hastings has been making use of artificial intelligence technology to make its recommendation engine more appealing to consumers.

In return, Wall Street has become OK with viewing Netflix as an entertainment company but valuing the stock as a tech company. If anything, Hastings has made it clear it's "all well and good to lose money now if you're going to dominate later."

"The more Netflix knows about what people love, what you love, the more it can scale that love into not profits," Cramer concluded. "Which is why, even after this run, it is still not too late to buy Netflix."

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Image credit: Bryan Gosline, CC BY-SA 2.0