2 Tech Stocks To Buy Now At Big Discounts For Long-Term Growth

Roku (ROKU Quick Quote ROKU - Free Report)

The streaming TV age is here and within a crowded space that includes Netflix (NFLX Quick Quote NFLX - Free Report), Disney (DIS Quick Quote DIS - Free Report), Amazon (AMZN Quick Quote AMZN - Free Report), and Apple (AAPL Quick Quote AAPL - Free Report) there’s only one pure-play streaming TV player poised to benefit from the growth of the entire industry: Roku. The firm became famous for its small plug-in devices that enable users to watch streaming content.

The company's tech is also built into smart TVs and Roku was the No. 1 smart TV OS sold in the U.S. in 2020, grabbing nearly 40% market share. Roku also sells wireless sound systems that compete against Sonos (SONO Quick Quote SONO - Free Report) and others.

These segments are important, but Roku’s bread and butter is its ad-heavy Platform unit that should propel growth for years. Roku makes money by selling ad space across its marketplace, as well as taking a share of streaming service’s subscription revenue and ad inventory. Roku allows marketers to buy targeted ads, promote their streaming movies or platforms, and more.

Meanwhile, the Roku Channel allows users to watch free, ad-supported streaming movies and TV shows. The firm bolstered its own offering through its January purchase of the streaming rights to all the shows from the now-defunct Quibi. And Roku’s Platform business has soared as advertisers follow consumers as they dump legacy media. Digital ad spending in the U.S. surpassed traditional outlets in 2019 and this trend is only going in one direction.

The company has also continued to boost its ad capabilities. This includes its April acquisition of Nielsen's Advanced Video Advertising business and it “entered into a long-term strategic partnership” with the historic marketing research firm and media data giant to further boost its advertising bona fides.

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