Hedge Funds Are Buying Roku (ROKU) in Droves – Here’s Why

Roku Inc (NASDAQ:ROKU) is one of the Cathie Wood 2026 Portfolio: 10 Best Stocks to Buy.

ARK cut its stake in streaming technology company Roku Inc (NASDAQ:ROKU) by 20% in the fourth quarter, but still ended the period with a $640.5 million position. The stock is up 35% over the past 12 months.

Insider Monkey’s database shows that the number of hedge funds having a stake in ROKU jumped by 20 in the fourth quarter as compared to the September quarter. Why is smart money interested in Roku Inc (NASDAQ:ROKU)?

Roku Inc (NASDAQ:ROKU) is seeing strong platform revenue gains amid growth in higher monetization through subscriptions and price increases. It’s focusing on high-margin platform revenue instead of low-margin hardware. Analysts believe secular growth catalysts for the stock include connected TV advertising, international streaming expansion and higher fill rates in ads.

Photo by Ashley Byrd on Unsplash

After Roku’s (NASDAQ:ROKU) strong Q4 results last month, Morgan Stanley said the company’s investments in retail partnerships and technology, and said longer TV lifecycles could help the company in the CTV market.

While we acknowledge the risk and potential of ROKU as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than ROKU and that has 10,000% upside potential, check out our report about this cheapest AI stock.

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