Insights

Why Roku Stock Jumped Today

What happened

Shares of Roku (NASDAQ: ROKU) rose on Tuesday, furthering their gains since the streaming platform announced an intriguing collaboration with Walmart (NYSE: WMT) late last week. 

As of 2:25 p.m. ET, Roku’s stock price was up more than 8%.

So what

Walmart and Roku will work together to bridge e-commerce and streaming. The plan is to make it easier for people to buy products directly on Roku’s platform. Walmart will fulfill the orders and serve as Roku’s exclusive retail partner.

“We’re working to connect with customers where they are already spending time, shortening the distance from discovery and inspiration to purchase,” Walmart Chief Marketing Officer William White said in a press release.

To make a purchase, Roku’s viewers can press a button on their remotes while watching an ad. Roku’s system will then pre-populate their payment information on a checkout page. Another tap of a button places the order, which Walmart then processes and ships.

“For years, streamers have purchased new Roku devices and signed up for millions of subscriptions with their Roku remote,” Roku executive Peter Hamilton said. “Streaming commerce brings that same ease and convenience to marketers and shoppers.”

Now what

E-commerce has long been viewed as a potentially lucrative opportunity for streaming providers. Roku’s partnership with Walmart is finally making that possibility a reality.

By giving marketers the ability not just to create demand but also directly capture sales, Roku is fundamentally altering the TV advertising landscape — and it could be a gamechanger for the streaming industry.

“No one has cracked the code around video shoppability,” White said. “By working with Roku, we’re the first-to-market retailer to bring customers a new shoppable experience and seamless checkout on the largest screen in their homes — their TV.”

Joe Tenebruso has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Roku. The Motley Fool has a disclosure policy.

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