NASDAQ: ROKU
Anthony Wood built something that sits in ninety million living rooms across America. Little black boxes that people plug into their televisions, then forget about. That’s the business model, more or less. Sell the hardware cheap, make the real money somewhere else.
The somewhere else is advertising. Roku made $881 million last quarter from their platform—that’s corporate speak for selling ads to people who just want to watch television without paying for cable. The old business of selling streaming devices is dying a slow death, down to just $141 million. Wood and his executive team saw this coming years ago.
The machine learning algorithms, those cold mathematical minds that never sleep, they’re cautiously optimistic. Fifty-five percent chance the stock goes up. Not exactly the kind of confidence that gets people excited at workplace presentations, but better than a coin flip.
The stock sits at $88.99, down a dollar and change from yesterday. Thirty-five billion hours of streaming last quarter. That’s a lot of people sitting in front of screens, letting Roku’s advertising partners communicate their messages during commercial breaks. Each hour watched is data collected, preferences catalogued, targeting refined.
Wall Street wants Roku to turn a profit by 2026. Right now they’re losing seventy-three cents per share, which sounds terrible until you realize they’re spending that money to build something bigger. The Roku Channel is now the second most popular app on their own platform. They bought Frndly TV for $185 million, adding more content to keep those eyeballs engaged.
The competition is fierce. Amazon, Google, Apple—they all want a piece of the streaming advertising business. These are companies with deeper pockets and longer reach. But Roku has something they don’t: they’re neutral territory. They don’t make shows, don’t own studios. They just connect viewers with content, then sell the space between.
That’s the bet Wood is making. That in a world where everyone wants to control everything, sometimes the most effective strategy is just being the road everyone has to travel.
This analysis is for informational purposes only and should not be considered as investment advice. Always conduct your own research and consult with qualified financial professionals before making investment decisions. Past performance does not guarantee future results.