What happened

Shares of Magnite (NASDAQ:MGNI) jumped 10.5% to all-time highs today after getting a price-target bump from Wall Street. Craig-Hallum boosted its valuation estimate from $25 to $45, which represents 24% upside from yesterday's closing price.

So what

Analyst Jason Kreyer reiterated a buy rating on the advertising technology specialist, arguing that Magnite will continue to benefit from the ongoing shift in ad budgets from linear TV to connected TV (CTV) platforms. The analyst believes that there are already signs of strong demand for CTV as we start 2021.

A hand holding a remote pointing at a TV

Image source: Getty Images.

For example, Magnite has an exclusive partnership with Disney-controlled Hulu, which is the largest ad-supported over-the-top (OTT) streaming service. Hulu currently has approximately 36.6 million paid subscribers, although some of the service's subscription tiers remove ads completely. Magnite also offers marketers an accelerated return on ad spending, according to Kreyer.

Now what

The COVID-19 pandemic accelerated cord-cutting throughout 2020, and many CTV companies that support OTT streaming have benefited as engagement has soared across streaming platforms.

An estimated 6.6 million households cut the cord last year, according to eMarketer, resulting in 77.6 million remaining households still subscribing to cable. That trend should continue into 2021, with 27% of households saying that they plan to cancel their cable bundles, according to a recent survey by ad tech peer The Trade Desk.

Both The Trade Desk and Magnite are positioned to capitalize from rising adoption and engagement of CTV platforms.

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