RGA Investment Advisors, an investment management company, has released its second-quarter 2025 investor letter. A copy of the letter can be downloaded here. The second quarter-end figures concealed the inherent volatility in the market, which began with a steep sell-off and ended with clarity around global trade that changed the environment for evaluating enterprises. In addition, you can check the fund’s top 5 holdings to determine its best picks for 2025.
In its second-quarter 2025 investor letter, RGA Investment Advisors highlighted stocks such as Roku, Inc. (NASDAQ:ROKU). Headquartered in San Jose, California, Roku, Inc. (NASDAQ:ROKU) is a TV streaming platform. The one-month return of Roku, Inc. (NASDAQ:ROKU) was -1.53%, and its shares gained 45.72% of their value over the last 52 weeks. On August 15, 2025, Roku, Inc. (NASDAQ:ROKU) stock closed at $90.29 per share with a market capitalization of $13.303 billion.
RGA Investment Advisors stated the following regarding Roku, Inc. (NASDAQ:ROKU) in its second quarter 2025 investor letter:
“Roku, Inc. (NASDAQ:ROKU) has been a wild ride for us. We first bought shares in late 2018, sold a few times along the way, but held onto a sizable position throughout the rollercoaster. We certainly learned some lessons about ourselves and our willingness to hold high valuations in order to spread a sizable tax hit over years (note: we will never tax derange ourselves into holdings through a valuation grind down again, as the market has a wicked way of reducing tax obligations as you wait). During the tariff crash, we meaningfully increased our position yet again.
Throughout the stock’s ascent, bears argued that Roku would rapidly lose market share to competition from Amazon and Google–well capitalized, formidable competitors. These bears were right, but for the wrong reasons. Roku has actually increased its device and household share now covering over half of all households in the US; however, the company stalled in pushing ARPU due to a confluence of forces, many of which stemmed from a strategic, but reversible decision. Roku was trying to build a walled garden, leveraging their unique and proprietary customer data to pull advertisers into their own Demand-Side Platform (or DSP). Unfortunately for Roku, advertisers had paths to reach Roku’s audience while working around the walled garden. For example, an advertiser could buy ads on Hulu, through a DSP like The Trade Desk and in doing so, avoid sharing a dime with Roku. This happened alongside a pullback in content companies chasing new audiences. During the pandemic, Roku’s largest advertising pool–Media and Entertainment (M&E). These were dollars streaming companies spent to acquire customers and drive engagement. As content companies rationalized their own costs, this pool of ad dollars collapsed. Although Roku’s overall ad revenue kept growing, it was far slower than before and came against a growing cost base…” (Click here to read the full text)
A large movie theatre filled with people enjoying a film streaming on a smart TV.
Roku, Inc. (NASDAQ:ROKU) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 56 hedge fund portfolios held Roku, Inc. (NASDAQ:ROKU) at the end of the first quarter, which was 37 in the previous quarter. While we acknowledge the risk and potential of Roku, Inc. (NASDAQ: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, Inc. (NASDAQ:ROKU) and that has 10,000% upside potential, check out our report about this cheapest AI stock.
In another article, we covered Roku, Inc. (NASDAQ:ROKU) and shared the list of stocks investors are dumping fast. In addition, please check out our hedge fund investor letters Q2 2025 page for more investor letters from hedge funds and other leading investors.
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Disclosure: None. This article is originally published at Insider Monkey.
