{"id":5027,"date":"2026-06-01T01:10:05","date_gmt":"2026-06-01T01:10:05","guid":{"rendered":"https:\/\/www.fintechpulse8.com\/?p=5027"},"modified":"2026-06-01T01:10:05","modified_gmt":"2026-06-01T01:10:05","slug":"cathie-wood-favorite-tech-stock-still-down-73-from-all-time-highs","status":"publish","type":"post","link":"https:\/\/www.fintechpulse8.com\/?p=5027","title":{"rendered":"Cathie Wood favorite tech stock still down 73% from all-time highs"},"content":{"rendered":"
<\/p>\n
Cathie Wood has never been shy about making big bets on names that most of Wall Street hasn’t fully figured out yet.<\/p>\n
According to data from StockCircle:<\/p>\n
\n
Wood’s firm, ARK Invest, first bought Roku<\/strong> back in the fourth quarter of 2019. <\/li>\n
Since then, she has bought the stock 14 more times and sold it on 14 occasions, according to data from StockCircle. <\/li>\n
The average buy price across those trades is roughly $131 per share, similar to the current trading price.\u00a0<\/li>\n<\/ul>\n
As of the most recent data, Wood owns 3.82 million shares worth approximately $497 million. <\/p>\n
That makes Roku (ROKU) her sixth-largest holding, representing 3.27% of her equity portfolio.<\/p>\n
So what does Wood see in a stock still sitting 73% below its all-time high? <\/p>\n
A recent conference appearance by Roku’s chief financial officer, Dan Jedda, offers some answers.<\/p>\n
Roku is now a monetization machine<\/strong><\/h2>\n
Three years ago, Roku was largely a hardware story. It was built around scale, not profit.<\/p>\n
The company had around 80 million streaming households when Jedda joined in May 2023. Today, that number has crossed 100 million. <\/p>\n
But the more meaningful shift is what Roku has done with that audience.<\/p>\n
Roku opened its platform to third-party demand-side platforms (DSPs), which are the automated systems that big brands and agencies use to buy digital advertising.\u00a0<\/p>\n
Fund manager buys and sells<\/strong><\/h3>\n
\n
Cathie Wood buys $2.5 million of tumbling megacap stock<\/strong><\/li>\n
Warren Buffett dumped 77% of Amazon to buy surging media stock<\/strong><\/li>\n
Cathie Wood buys $11 million of tumbling megacap tech stock<\/strong><\/li>\n<\/ul>\n
Before this pivot, Roku required all programmatic advertisers to use its own DSP. That was limiting by design but damaging in practice.<\/p>\n
Now, Roku works with all the major DSPs. That includes a high-profile deal with Amazon, which lets advertisers match Roku’s first-party viewer data with Amazon’s shopping data inside a privacy-safe environment.<\/p>\n
Jedda called the Amazon deal “a major unlock,” and the numbers seem to back that up. <\/p>\n
Advertising gross margins have climbed to just over 60%, up 450 basis points year over year.<\/p>\n
That margin improvement matters because it directly addresses one of investors’ biggest fears: that working with outside DSPs would erode Roku’s profitability.\u00a0<\/p>\n
Roku’s subscription business is key<\/strong><\/h2>\n
Until recently, Roku didn’t break out its advertising and subscription revenues separately. <\/p>\n
When it finally did, many people were surprised by how large and fast-growing the subscription segment had become.<\/p>\n
Jedda was blunt about why the disclosure was overdue, as investors didn’t understand how significant the subscription business was.<\/p>\n
Jedda stated:<\/p>\n
\u201cWe are constantly asking ourselves how can we give our investors and potential investors the information to understand our company, but also not give out too much competitive information.\u201d<\/p>\n
The segment has gross margins just above 40%, which are lower than those of the ad business. <\/p>\n
However, it is a steadily growing revenue stream that Jedda describes as “annuity-like.”\u00a0<\/p>\n
Premium subscriptions, where Roku embeds partner content throughout the user interface and drives traffic directly to those apps, are the main growth engine here.<\/p>\n
Roku also owns two subscription products. It acquired Frndly and built Howdy from scratch. Howdy, a low-cost, ad-free streaming service, has already expanded to Amazon’s platform and into Mexico.<\/p>\n
Mexico is a useful case study for Roku’s international ambitions more broadly. The company has nearly as many streaming households there as in the United States.\u00a0<\/p>\n\n
Roku’s path to $1 billion in free cash flow<\/strong><\/h2>\n
Roku operates a business that is extraordinarily light on capital spending. <\/p>\n
Jedda said CapEx runs in the “single-digit millions,\u201d which means nearly all of Roku’s earnings flow directly into free cash flow.<\/p>\n
Related: Cathie Wood sells $16M of surging semiconductor stock<\/strong><\/p>\n
Roku also carries roughly $1.2 billion in net operating losses (NOLs) on its balance sheet, which will shield it from cash taxes for the next couple of years as it turns profitable.\u00a0<\/p>\n
That means free cash flow will actually exceed EBITDA (earnings before interest, taxes, depreciation, and amortization) in the near term.<\/p>\n
Jedda has publicly committed to reaching $1 billion in annual free cash flow by 2028, and he suggested it could come sooner.\u00a0<\/p>\n
Analysts tracking Roku forecast free cash flow to expand from $478.44 million in 2025 to $1.78 billion in 2030.\u00a0<\/p>\n
If the tech stock is priced at 22x forward FCF, which is similar to the current multiple, it could double within the next four years.\u00a0<\/p>\n
Roku is already using excess cash to buy back shares. The first quarter of 2026 marked the first time in the company’s history that shares outstanding declined sequentially.<\/p>\n
For Wood, it is the kind of inflection point ARK tends to bet on early and hold through the noise.<\/p>\n
Whether the stock gets back to its 2021 peak near $480 is anyone’s guess. But the business Roku is building today looks very different from the one that earned that valuation, and arguably more durable.<\/p>\n
Related: Cathie Wood buys 6.5M of surging mag 7 stock<\/strong><\/p>\n
Cathie Wood has never been shy about making big bets on names that most of Wall Street hasn’t fully figured out yet. According to data from StockCircle: Wood’s firm, ARK… <\/p>\n","protected":false},"author":1,"featured_media":5028,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[246],"tags":[6707,1437,1951,3610,91,602,1438],"class_list":["post-5027","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-popular","tag-alltime","tag-cathie","tag-favorite","tag-highs","tag-stock","tag-tech","tag-wood"],"_links":{"self":[{"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=\/wp\/v2\/posts\/5027","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=5027"}],"version-history":[{"count":0,"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=\/wp\/v2\/posts\/5027\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=\/wp\/v2\/media\/5028"}],"wp:attachment":[{"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=5027"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=5027"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=5027"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
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