Cathie Wood Says Roku to $1,500—Is She a Genius or Just High on Streaming?

Cathie Wood—or as her name roughly translates in Korean, “Money Tree”—is back at it again, planting seeds of bold predictions and hoping they grow into profits. This time, she’s setting her sights on a streaming stock that's been gathering some dust over the last year. I’m talking about Roku—which is down 19% (opposed to the S&P 500 up 17%), and analysts have been eyeing it like it’s got “risky” tattooed on its forehead. 

Known for her crazy predictions, Wood believes Roku could skyrocket to $1,500 per share by 2026. That's 1,340% upside from where it’s currently trading. But is this forecast realistic or some dream after a night of eating too much Little Caesars Pizza? Let's dive into the numbers.

After a rough start to the year, Roku seems to be on the rebound. The stock is up 38% over the last month, driven by upgrades from multiple analysts and a new found interest in its growth potential. Roku, known for its streaming devices, is also quickly becoming a dominant player in the advertising game. In fact, 85% of its revenue in the second quarter came from advertising—not from its devices. With viewers cutting the cable cord like Taylor Swift with her latest ex, Roku is ready to take advantage of this ongoing shift.

Roku’s latest earnings came in hot. Revenue jumped 14% year-over-year to $968 million, while operating losses slimmed down to $71 million — we love a good weight loss story, right? Meanwhile, people are clearly binge-watching like it’s 2020, with streaming hours shooting up 20% and active accounts hitting a record 83.6 million. And those Roku devices? Flying off the shelves with a 39% sales spike, all part of Roku’s master plan to get more eyeballs glued to its platform, which ultimately means more cash from advertisers.

So, what makes Cathie Wood so bullish on Roku? Wood’s analysis boils down to the explosion in connected TVs (CTVs). Ark Invest’s financial model predicts that by 2026, there will be over 1.3 billion CTVs in use globally. Out of those, Roku will reportedly capture 186 million accounts, with each account streaming around five hours of content daily. If this pans out, Roku could become the king of ad-supported streaming, commanding top dollar from advertisers desperate to reach this growing audience.

Ark's upside somewhat rosy scenario suggests Roku could bring in $32 billion in revenue by 2026. That’s a huge leap from where they are today, but not impossible if the company continues to expand its user base and ad game. Given the ongoing trends—cord-cutting, increasing streaming hours, and a growing ad market—maybe Cathie’s not as off her rocker as it seems.

But let’s pump the brakes a little…Before we start throwing money at Roku like it's gonna takeover Netflix, it's worth mentioning that the stock is not without its risks. Roku has seen 22 moves greater than 5% in the past year, highlighting its volatility. Despite the recent rally, Roku is still trading 30.8% below its 52-week high and down 16.9% for the year. For every positive analyst upgrade or new advertising partnership, there’s been skepticism about Roku’s ability to turn its growing user base into long term profit.

While the momentum is currently in Roku's favor, some challenges could still derail Cathie Wood’s $1,500 dream. For example, increasing competition from other streaming platforms and hardware providers could eat into Roku’s market share. And even though Roku's ad business is recovering, it’s still exposed to the condition of the economy that could squeeze ad budgets again.

The bottom line here is that Cathie Wood’s $1,500 target is ambitious, but Roku's recent performance suggests it’s not entirely out of reach. The company is growing its user base, expanding its ad business, and benefiting from the common trend of cord-cutting. Maybe, just maybe, "Mama Cathie" is right this time.

Forget about Cathie Wood’s wild $1,500 Roku prediction for a second—there’s an even bigger opportunity brewing right now, and it’s on the verge of something huge.

While Cathie’s clearly just saying anything to stay relevant, our Stocks.News premium members have already locked in a massive 96% gain from yesterday’s alert—and a short squeeze could be just around the corner. 

With all this momentum, there’s still plenty of room for this stock to take off.

Don’t miss out on what could be the second leg of this explosive run—click here to upgrade to premium and get ahead of the squeeze!

Stocks.News holds a position in Roku and Netflix.