Shares of the video-streaming platform company Roku (ROKU -6.60%) rose 11.9% over the past week as investors processed the recent earnings report from Netflix. While the two companies have different business models, Roku investors applied Netflix's solid quarter to the broader video-streaming space.
Additionally, Roku's shares likely also made some gains as investors flooded back to technology stocks this week following months of avoiding the sector.
Roku's stock got a major bump this week after Netflix's second-quarter earnings beat analysts' consensus estimate and reported subscriber losses that were better than expected.
Netflix lost 970,000 subscribers in the quarter, which doesn't sound great but the figure was better than the 2-million net loss the company had forecasted. Additionally, the company's non-GAAP earnings per share of $3.20 were significantly better than analysts' average estimate of $2.95.
Netflix's strong quarter encouraged Roku investors to see that the video-streaming space is alive and well, and Roku's stock popped nearly 9% as a result.
In addition to those gains, Roku's shares were also rising this week as some investors grew somewhat optimistic about the tech sector again.
The tech-heavy Nasdaq Composite was up by 4.7% this week as some investors believed that the tech sector had finally reached its bottom. Tech stocks have suffered as inflation has soared and as the Federal Reserve hikes interest rates, but a slight optimism toward the sector, likely after solid earnings from Netflix, helped raise investor sentiment.
Despite Roku's gains this week, the stock is still down 58% year to date. It's hard to know if Roku's shares are back on an upward trajectory or if the recent share-price climb is just a temporary blip.
Either way, investors will get more insight into how Roku is doing when the company reports its Q2 results on July 28.