What happened
Shares of Roku (ROKU 0.68%) got clobbered Tuesday, sinking as much as 7.6%, though the stock recovered slightly and ended the day down just 4.4%.
The streaming pioneer actually delivered decidedly good news for investors, but was the victim of an overwhelming downdraft in technology stocks.
So what
Roku started out the year by announcing that the Roku Operating System (OS) was "the No. 1 smart TV OS sold in the U.S.," according to data supplied by market research company NPD Group.
Image source: Getty Images.
Furthermore, Roku announced a partnership with television manufacturer Sharp, which will collaborate with the company to develop several Sharp Roku TV models for customers in the U.S. Sharp will release a series of HD and 4K ultra-high-definition (UHD) TV models that will feature the Roku OS, "offering a customizable home screen, compatibility with the three major voice ecosystems, and access to thousands of channels including over 200 live TV channels."
"We are excited to collaborate with Roku and equip our new HD and 4K UHD TVs with their award-winning OS," said Jim Sanduski, president of Sharp Home Electronics Company of America. "Pairing our long-standing heritage in display technology with Roku's best-in-class, easy-to-use interface is a winning combination for our consumers."
Roku also said that it is expanding its OS licensing program in Mexico, adding Aiwa and HKPRO brands to its stable of partnerships. This follows an announcement late last year that Roku had become the No. 1 streaming platform in Mexico.
Now what
Blue chip stocks managed gains on Tuesday, outpacing the S&P 500, which closed out the day at roughly breakeven. Both were in stark contrast to the Nasdaq Composite, which declined more than 1.3%, as the downdraft in technology stocks continues.
Adding insult to injury, some investors fear that Roku's decelerating growth in active accounts and streaming hours is a red flag. However, this coincided with the loosening of pandemic-related restrictions and summer vacations, and stronger growth will likely resume when the company reports earnings over the next few weeks.
For savvy investors with a long-term view, this likely represents a buying opportunity for Roku stock.
