It's been an eventful year for streaming service stocks. There have been not one but two bidding wars for media stocks with prolific premium digital platforms this year. Will there be more wedding bells in 2026?
The COVID-19 crisis found a lot of us warming up to streaming services. We never let go of that remote control, even after social spaces began to reawaken. The world of digital delivery of video, music, and gaming is here to stay.
Who will be the top-performing streaming stock in 2026? There may be another bidding war or two in the mix in the year ahead, but I'm going with the a pioneer to lead the way. I believe Roku (ROKU 3.82%) will be the industry's top performer.
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Roku like a hurricane
There are plenty of pretty stock charts in the streaming space this year. Roku stock is one of them. Shares of the company behind the first TV streaming device have soared 50% in 2025, heading into the final two trading days of the year.
Roku didn't need a bidding war to get rolling. It earned its upticks. The North American leader in operating systems and related devices for consuming streaming content through TVs is stretching its streak of double-digit annual revenue growth to more than a decade in 2025. It returned to profitability in the second quarter, ahead of analyst expectations.
There were 89.8 million households on its free platform at the start of the year, spending an average of more than four hours a day on the platform. There is no current update on its active users. Roku, like at least two other major streaming services, has stopped providing that kind of data. However, the 36.5 billion hours spent streaming on Roku in its latest quarter is 14% higher than it was a year ago. Roku's popularity continues to expand.
NASDAQ: ROKU
Key Data Points
Headwinds are becoming tailwinds
Roku stock more than doubled in 2023, only to give back a chunk of those gains a year later. But this time is different. A year that began with question marks ends on exclamation points.
And there's more to the story than just the continued growth and return to sustainable profitability. Roku was dogged a couple of years ago when its average revenue per user stalled, briefly retreating. But no one is as concerned about Roku's role in ad tech anymore. A win-win partnership with Amazon (AMZN 1.30%) this summer is tossing out a wider net of potential advertisers on Roku's platform.
The new year is promising. Analysts are banking on seeing revenue rise 13% to $5.3 billion, extending its run of double-digit annual growth on the top line. Adjusted earnings should more than triple to $1.15 per share. This isn't a surprise, given the model's scalability and its lack of positive bottom-line results in the first quarter of this year.
Value investors will point out that Roku isn't cheap at almost 100 times forward earnings, but this isn't the streaming service's final form. Wall Street pros expect Roku's earnings to double in 2027. Ad dollars will continue migrating to connected TV platforms that help marketers reach younger viewers who aren't in the crosshairs of traditional advertising outlets.
Roku won't appear to be a cheap stock. But it didn't look like an inexpensive stock in 2023 or 2025, and you saw how well that played out for investors. Valuation isn't as easy as nabbing a low multiple. The best stocks are the ones that aren't obvious, but are rather compelling values hiding in plain sight.
Roku's market leadership across North America matters. It has taken on some of the richest companies in consumer tech, and it's still on top. Maybe it's Roku that soars on a bidding war in 2026, but the real prize will come if it can sustain its independence.
Roku is rocking. It's time to keep rolling.
