Why These 2 Growth Stocks Are Flying Higher

The stock market maintained its positive momentum on Tuesday, with the Dow Jones Industrial Average (^DJI 0.40%) leading the way higher and rising nearly 1% on the day. Gains for the Nasdaq Composite (^IXIC 2.02%) and S&P 500 (^GSPC 1.02%) were also sizable and reflected a positive attitude among many market participants as investors prepare for the latest inflation report on Wednesday morning.

Data source: Yahoo! Finance.

Growth stocks came under pressure during 2022's bear market, but many of them have rebounded convincingly. Good news helped lift both Roku (ROKU -10.29%) and Coinbase Global (COIN 5.68%) on Tuesday, and the upward momentum the two stocks have built could carry their share prices even higher in the near future. Here's why.

Roku makes a link to e-commerce

Shares of Roku jumped more than 11% on Tuesday. The streaming television platform provider made a giant leap forward on a key element of its long-term monetization strategy, and investors liked the prospects for it to grow over time.

Roku announced that it had entered into a partnership with Canadian e-commerce platform giant Shopify (SHOP 1.11%). Under the arrangement, viewers of Roku streaming TV channels will be able to purchase products directly from Shopify merchants in response to customized advertising that Roku will include in its programming. All viewers will have to do is to press OK on their Roku devices in order to get more information about advertised products, and ultimately to make purchases.

The partnership will highlight the efforts that Roku has made to produce a seamless purchase experience for its customers. Using the Roku Pay service, viewers will be able to check out and then return directly to watching their show once complete. For Shopify merchants, the feature makes it far easier to woo potential purchasers without a long and involved process.

Even after today's big gains, Roku shares remain more than 80% below their highs in early 2021. It'll take a lot longer for the streaming TV company to ascend to those former levels, but some shareholders are more optimistic about Roku's prospects to get there, given enough time.

Coinbase gets more buy-in

Shares of Coinbase Global also rose sharply, climbing nearly 10%. The cryptocurrency exchange provider has caught onto a new trend in the industry, and another key player hopped on board to seek out Coinbase's assistance with a new business initiative.

Several financial institutions have sought to introduce spot Bitcoin (BTC -1.91%) ETFs, despite the past reluctance of the U.S. Securities and Exchange Commission to approve them for trading. One recent argument, however, is that the SEC would prefer to have Bitcoin market surveillance in place so that it's easier to monitor market conditions and avoid any irregularities or fraud.

Cboe Global Markets (CBOE -1.81%) added itself to the Coinbase mix, amending applications for three Bitcoin ETFs to trade on its exchanges to provide for Coinbase being a surveillance-sharing agreement partner. Investors are hopeful that these Bitcoin ETFs will finally gain SEC approval, producing another revenue stream for Coinbase.

It's ironic that Coinbase is hoping for the SEC to help it, given that the regulator filed suit against Coinbase with allegations of its failing to register as a securities exchange. However, even though the cryptocurrency industry remains in a gray area right now, investors still seem more comfortable with Coinbase's long-term prospects.