Insights

Why Roku Stock Jumped 11% Today

What happened
Roku (NASDAQ: ROKU) shareholders just got a break from the negative programming they’ve been watching lately. The streaming video giant’s stock rose 11% by 1:30 p.m. ET on Friday to easily outpace the 2.6% rally in the S&P 500.
The spike only erased a small portion of recent losses for the stock, which remains lower by nearly 60% so far in 2022. But the rebound also reflects rising optimism about Roku’s business model in potentially volatile economic times.
Image source: Getty Images.

So what
The clearest factor driving Roku’s stock higher on Friday is the rebound in tech stocks following an intense selling focus in this area. The Nasdaq Composite index jumped nearly 4% in early trading, and peer Netflix rose at the same rate. The Nasdaq remains lower by roughly 25% so far this year.
But Roku has also drawn more excitement from investors following its early May earnings report. That announcement showed that the business is still gaining subscribers and engagement, leading to more advertising revenue.
There is still a huge amount of spending that’s set to shift into the streaming content space from the broadcast TV world, and Roku stands to benefit from that move.
Now what
The company faces significant challenges in the short term. These include soaring costs for its streaming hardware and weaker sales of smart TVs compared with 2020 and 2021. These factors, plus slower consumer spending growth overall, might pressure the streaming video industry over the next several quarters.
Yet Roku’s platform is still providing lots of value to advertisers and TV fans, and that success implies a much bigger global sales base over time. That optimism spurred a bigger bounce higher for the stock on Friday at a time when many investors tiptoed back into growth stocks.
Demitri Kalogeropoulos has positions in Netflix. The Motley Fool has positions in and recommends Netflix and Roku. The Motley Fool has a disclosure policy. –

What happened

Roku (NASDAQ: ROKU) shareholders just got a break from the negative programming they’ve been watching lately. The streaming video giant’s stock rose 11% by 1:30 p.m. ET on Friday to easily outpace the 2.6% rally in the S&P 500.

The spike only erased a small portion of recent losses for the stock, which remains lower by nearly 60% so far in 2022. But the rebound also reflects rising optimism about Roku’s business model in potentially volatile economic times.

Image source: Getty Images.

So what

The clearest factor driving Roku’s stock higher on Friday is the rebound in tech stocks following an intense selling focus in this area. The Nasdaq Composite index jumped nearly 4% in early trading, and peer Netflix rose at the same rate. The Nasdaq remains lower by roughly 25% so far this year.

But Roku has also drawn more excitement from investors following its early May earnings report. That announcement showed that the business is still gaining subscribers and engagement, leading to more advertising revenue.

There is still a huge amount of spending that’s set to shift into the streaming content space from the broadcast TV world, and Roku stands to benefit from that move.

Now what

The company faces significant challenges in the short term. These include soaring costs for its streaming hardware and weaker sales of smart TVs compared with 2020 and 2021. These factors, plus slower consumer spending growth overall, might pressure the streaming video industry over the next several quarters.

Yet Roku’s platform is still providing lots of value to advertisers and TV fans, and that success implies a much bigger global sales base over time. That optimism spurred a bigger bounce higher for the stock on Friday at a time when many investors tiptoed back into growth stocks.

Demitri Kalogeropoulos has positions in Netflix. The Motley Fool has positions in and recommends Netflix and Roku. The Motley Fool has a disclosure policy.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

  • This field is for validation purposes and should be left unchanged.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;


To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.


An active and funded account with a positive trading balance is required to continue to have access to the tools;


Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;


Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US & HK* Trades. Click Here!