Roku Stock: Strong Fundamentals Clash with Institutional Selling

Streaming platform leader Roku has delivered a powerful financial performance for the second quarter of 2025, showcasing a remarkable return to profitability and strategic expansion. However, this positive momentum is creating a market divergence, as prominent investment firm Ark Invest, led by Cathie Wood, has been reducing its stake in the company. This contrast between robust fundamentals and institutional selling activity presents a complex picture for investors.

A Quarter of Impressive Financial Turnaround

Roku’s latest earnings report signals a significant corporate turnaround. For Q2 2025, the company posted a net profit of $10.5 million, a substantial improvement from the $34 million loss recorded in the same period last year. Total revenue saw a healthy 15% climb, reaching $1.11 billion. This growth was largely fueled by an 18% surge in platform revenue. Engagement on the platform also soared, with users streaming 35.4 billion hours of content—a 17% year-over-year increase.

This strong operational performance underpins analyst confidence, with many forecasting sustained double-digit growth for Roku. Full-year 2025 revenue projections stand at $4.61 billion, with an anticipated EBITDA of $350 million.

Strategic Moves to Widen the Ecosystem

Beyond the numbers, Roku is aggressively executing a strategy to broaden its ecosystem and cement its market dominance. A key recent launch is the Aurzen Roku TV Smart Projector D1R Cube, a projector integrated with the Roku operating system, extending the company’s reach into big-screen entertainment. In a more significant development, since September 20, 2025, Roku has partnered with ten different TV brands to distribute Roku TV sets across the United States.

Should investors sell immediately? Or is it worth buying Roku?

The company’s advertising business continues to gain scale. Its partnership with Amazon Ads now reaches an estimated 80 million U.S. households with connected TVs. Furthermore, the introduction of the Roku Data Cloud in January 2025 is enhancing its capabilities in data-driven advertising. Roku maintains its leadership in the U.S., holding a market share exceeding 50% for TV operating systems in broadband households.

Institutional Selling Raises Questions

Despite this strong backdrop, not all major investors are maintaining their positions. Ark Invest, typically known for its focus on innovative companies, sold 22,732 Roku shares last Friday, a transaction valued at approximately $2.25 million. This follows other sales by the fund in the preceding week, potentially indicating a shift in its outlook on the stock. Adding to the insider transaction tally, Roku’s CFO, Dan Jedda, sold 3,000 shares on September 15 as part of a pre-arranged trading plan.

The Path Forward Hinges on Q3 Results

The investment thesis for Roku now faces a critical test at the end of October when the company reports its third-quarter 2025 results. Market experts are anticipating earnings per share of $0.07, which would represent a significant improvement over the previous year. Until then, the stock is likely to be influenced by the tug-of-war between its solid fundamental metrics and the cautious sentiment reflected by these institutional sales.

The central question for investors is whether Ark Invest’s strategic retreat is a misjudgment of Roku’s potential or a prescient move based on insights not yet visible in the published financial data.