MSFT

Microsoft Corporation

267.70
USD
3.41%
267.70
USD
3.41%
241.51 349.67
52 weeks
52 weeks

Mkt Cap 2.01T

Shares Out 7.51B

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Why Roku Stock Tumbled on Monday

What happened Early in the trading day on Monday, shares of Roku (NASDAQ: ROKU) turned sharply lower, declining as much as 6.7%. By 12:46 p.m. ET, the stock was still down 3%. The catalyst that sent the streaming pioneer tumbling was a report that a big player was entering the streaming device and connected-TV space. So what Microsoft (NASDAQ: MSFT) is working to expand is Xbox Cloud game-streaming platform. Over the coming year, the company plans to release a dongle or set-top box that will allow users to connect directly to the platform, while also providing access to a variety of streaming services, according to VentureBeat. Microsoft is also partnering with Samsung to provide access to its cloud gaming platform via the company's smart TVs. These moves will give casual or even non-gamers the opportunity to try Microsoft's cloud gaming service without having to lay out for an expensive console. This could potentially impact Roku on two fronts. First, many viewers connect to its streaming platform using Roku's namesake devices. Additionally, the Roku operating system (OS) is licensed to a large number of television manufacturers that don't have the expertise or desire to create their own connected-TV OS. In both cases, rival devices from Microsoft could represent additional competition, and potentially stunt Roku's account growth, which is the funnel that feeds its digital advertising business. Now what It's likely that these moves would only be indirect competition to Roku's streaming dominance. Roku provides access to roughly 10,000 ad-supported and subscription streaming channels, making it the top choice for viewers. This variety allowed the streaming pioneer to go head to head with Amazon's Fire TV and steal its crown. Not many companies can claim they have competed with Amazon and emerged the winner. Furthermore, while there are a growing number of connected-TV operating systems, none offers the vast selection of programming choices that viewers get from Roku. While these latest developments certainly bear watching, Roku has earned the distinction as the go-to device and operating system for ease of streaming, and this move to attract casual gamers likely won't change its industry-leading position. 10 stocks we like better than Roku When our award-winning analyst team has a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.* They just revealed what they believe are the ten best stocks for investors to buy right now... and Roku wasn't one of them! That's right -- they think these 10 stocks are even better buys. *Stock Advisor returns as of April 27, 2022 John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Danny Vena has positions in Amazon, Microsoft, and Roku. The Motley Fool has positions in and recommends Amazon, Microsoft, and Roku. The Motley Fool has a disclosure policy. The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. Founded in 1993 in Alexandria, VA., by brothers David and Tom Gardner, The Motley Fool is a multimedia financial-services company dedicated to building the world's greatest investment community. Reaching millions of people each month through its website, books, newspaper column, radio show, television appearances, and subscription newsletter services, The Motley Fool champions shareholder values and advocates tirelessly for the individual investor. The company's name was taken from Shakespeare, whose wise fools both instructed and amused, and could speak the truth to the king -- without getting their heads lopped off.

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