VIDEO: Is the Bottom in for Roku?
May 13, 2021
Knox Ridley
Portfolio Manager
The last few months have been difficult for tech growth investors. In isolation, it would appear that the party is over, and the broad market is likely to follow. However, if we track where the money is flowing, it appears that the standard safe haven plays, like Staples, Utilities and Gold, are not receiving the bulk of the rotation. Instead, money is flowing into transportation stocks, industrial stocks and financials.
This does not hint at a pre-recession bear market, and instead appears to be quite bullish for a long-term advance. Furthermore, if we note the outperformance of the equal-weight S&P 500 vs. the market-cap weighted S&P 500, this trend also speaks of an economy that is primed for expansion. In other words, the weight index is more representative of a healthier economy, while the market-cap weighted index is focused in bigger names that are in strong trends.
Despite the narrative around inflation fears, or the economy priming for a post-covid world, within the context of last year’s incredible advance, this drawdown in tech growth appears to be normal given the gains we saw last year. Last year was an overreaction, and this year is an overreaction in the opposite direction. We don’t let this scare us out of quality tech companies and we believe the sell-off is providing some stellar opportunities. In fact, earnings prove tech isn’t slowing down in the face of tough covid comps.
One of those names is Roku. Beth Kindig was the first analyst to understand the ad platform story and the first to recommend the company in May of 2018. Since then, as the portfolio manager for the research site, I’ve successfully entered the stock many times, including as low as $28. Yet more importantly, I’ve also cautioned our readers when we weren’t buying for the I/O portfolio, such as when the stock was over-extended and did not have a favorable setup.
For instance, there were signs of weakness in Roku at the all-time high. We noted several times that the momentum was fading at key resistance zone and warned our subscribers. Now, with prices down as much as 36%, we are seeing the current pullback as a normal drawdown within a much larger uptrend.
Although many investors are worried about another bear market, the Nasdaq-100 (Ticker: NDX) is still following our expected path. To learn more about what we’re watching for in NDX, click here.
To find out what levels we’re watching for Roku, please see the video below.
We believe the trends that propelled Roku to new highs, OTT and connected TV ads, have more room to run, and this drawdown is providing an excellent opportunity to participate in the next leg up. These microtrends are in full effect and expanding globally, which is why we identified several buying opportunities within this correction.
You can browse Beth’s previous research here as she laid out the exact path Roku is taking nearly three years ago.
The Crucial Difference Between Roku and Netflix
Q4 Earnings Analysis for Shopify, Roku, Fiverr And Palantir
Will Roku Go Boom or Bust This Year
Roku’s Stock Price: Will There Be Another Pullback?
Roku Q3 Earnings: Choppy But Unshakeable Long-Term
Update on $ROKU – Will Roku Miss Earnings?
3 Reasons Why Roku Will Be The Next Tech Darling
Here’s Why Roku Stock Will Surpass $100 In Next Two Years
Long on Roku – Even if they Miss Q1 Earnings
Gains of up to 2,160% from our Free Newsletter.
Here are sample stock gains from the I/O Fund’s newsletter --- produced weekly and all for free!
2,160% on Nvidia
675% on Bitcoin
*as of Mar 27, 2025
Our newsletter provides an edge in the world’s most valuable industry – technology. Due to the enormous gains from this particular industry, we think it’s essential that every stock investor have a credible source who specializes in tech. Subscribe for Free Weekly Analysis on the Best Tech Stocks.
If you are a more serious investor, we have a premium service that offers lower entries and real-time trade alerts. Sample returns on the premium site include 3,430% on Nvidia, 915% on Chainlink, and 1,020% on Bitcoin. The I/O Fund is audited annually to prove it’s one of the best-performing Funds on the market, with returns that beat Wall Street funds.
Get a bonus for subscription!
Subscribe to our free weekly stock
analysis and receive the "AI Stock: 5
Things Nobody is Telling you" brochure
for free.
More To Explore
Newsletter
Oracle Stock Outlook: Revenue Could Double by FY2029, yet Targets Seem Lofty
Late in 2024, Oracle outlined an ambitious plan to nearly double its revenue by fiscal 2029, hinging on long-term growth in enterprise AI and cloud spending. Oracle sets itself apart from its hypersca
I/O Fund Reports 210% Cumulative Return -- Ranking Above Wall Street's Best
In 2024, I/O Fund posted a 35% return, significantly outperforming popular tech ETFs, which recorded an 8% return over the same period. On a cumulative basis, the results translate to a remarkable 219
The Harsh Truth: Retail Investors Take the Brunt of Market Losses
Retail investors face significant disadvantages in the stock market, often underperforming institutional investors by a wide margin. Studies show that high-frequency trading firms dominate market acti
NVIDIA Blackwell Ultra Fuels AI & HPC Innovation, Efficiency and Capability
NVIDIA’s latest Blackwell Ultra GPU, unveiled at NVIDIA GTC 2025, is transforming AI acceleration and high-performance computing (HPC). Designed for the “Age of Reasoning,” these cutting-edge GPUs del
NVIDIA’s GB200s for up to 27 Trillion Parameter Models: Scaling Next-Gen AI Superclusters
Supercomputers and advanced AI data centers are driving the AI revolution, enabling breakthroughs in deep learning and large-scale model training. As AI workloads become increasingly complex, next-gen
Nvidia CEO Predicts AI Spending Will Increase 300%+ in 3 Years
Nvidia has traversed choppy waters so far in 2025 as concerns have mounted about how the company plans to sustain its historic levels of demand. At GTC, Huang threw cold water on many of the Street’s
AI Data Center Power Wars: Brown vs. Clean vs. Renewable Energy Sources
AI data centers are at the heart of the AI revolution, but their massive energy demands raise critical questions. With power consumption expected to grow 160% by 2030, data centers are turning to a mi
Why Gas Pipelines Are the Unsung Heroes of AI Data Center Expansion
Natural gas is emerging as the backbone of AI data center expansion, with demand expected to reach up to 6 billion cubic feet per day by 2030. As AI-driven infrastructure surges, data centers are turn
Alibaba Stock: China Has Low AI Revenue Compared to United States
Alibaba’s AI-driven cloud revenue is surging with six consecutive quarters of triple-digit growth. However, its AI earnings remain a fraction of what U.S. tech giants report, with Microsoft leading at
Unlocking the Future of AI Data Centers: Which Fuel Source Reigns Supreme in Efficiency?
AI data centers are projected to consume 9% of U.S. electricity by 2030, driven by soaring GPU power demands, with Nvidia’s GB200 reaching 2,700W—a 300% increase over previous generations. As AI racks