1 Reason Now Is a Great Time to Buy Roku Stock

Key Points

• Its single user interface is valuable for viewers looking to aggregate all their streaming options.

• Thanks to its position in the media landscape, the business is able to generate ad revenue.

• Streaming entertainment and digital advertising should drive revenue gains for Roku.

• 10 stocks we like better than Roku ›

Despite their heightened volatility, shares of Roku (NASDAQ: ROKU) are providing a boost for investor portfolios. In the past 12 months, they've soared 55% (as of Aug. 14). However, they still trade a gut-wrenching 82% off their peak from July 2021.

The business continues to report solid financial results, which can drive investor optimism. Relating to Roku's opportunity ahead, here's one reason now is a great time to buy this streaming stock.

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Tapping two expanding markets

Roku benefits from the ongoing cord-cutting trend. Households that ditch their cable TV subscriptions and choose streaming services lead to a growing base of potential customers. And with the huge number of content choices out there, consumers value having a streaming platform that aggregates them all in a single interface.

Additionally, Roku generates revenue from its digital ad efforts, which shows up in its platform segment. It recently struck a deal with Amazon to improve targeting capabilities for ad buyers, highlighting the valuable digital real estate that Roku owns. According to Grand View Research, the digital advertising industry is expected to grow at an annualized rate of 15% through the rest of this decade to $1.2 trillion.

In the second quarter of 2025, Roku viewers streamed a whopping 35.4 billion hours of content. And at the end of last year, there were 89.8 million accounts on the platform. As we look ahead, it's clear that streaming will continue to steal eyeballs and viewing time. And with that trend, the ad dollars will follow.

With two powerful secular trends (streaming entertainment and digital advertising) at its back, Roku should be able to register strong revenue growth for many years. And this favorable setup is one reason to scoop up shares today.

Should you invest $1,000 in Roku right now?

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