Roku Tech Nvidia Micron

Why Roku’s Stock Is Not A Streaming Play- Plus S&P 500, Nvidia, Micron and Tech

This column is my opinion and expresses my views. Those views can change at a moments notice when the market changes. I am not right all the time and I do not expect to be. I disclose all my positions clearly listed on the page, and I do not trade my account on the stocks spoken of in this column unless fully disclosed. If that does not work for you stop reading and close the page. Do not bother me or harass me.

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Why Roku’s Stock Is Not A Streaming Play- Plus S&P 500 Record, Nvidia, Micron and Tech

Roku’s stock continues to surge higher on calls of it being a streaming media play, however it would seem to me, to be anything but. Meanwhile, the S&P 500 continues to hit new record highs, while Nvidia and Micron continue to stuggle.

S&P 500 Record High

The S&P 500 continues to rally, up about 90 bps mid-way through trading on Friday. The index is now sitting at 2,675, and approaching the 2,700 level with about two weeks left in 2017. The S&P 500 just continue to rise, and is approaching the box we targeted a few weeks ago.

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S&P 500

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Nvidia and Micron

We will continue to follow the trend in Nvidia and Micron because it has been so exciting to watch, and these two stock had been up by over 100 percent at one in 2017, and have given back sizeable amounts.

The rally today is not without Technology, in fact, the NASDAQ is up over 1 percent. Nvidia shares are up a little less than 2 percent as of 1:45 PM. Which given the steep pullback of about 13 percent, just doesn’t seem like much of a rally. Nvidia’s rallied failed today at the $191.50 resistance level, not a good sign.


Micron shares are struggling as well, up only 50 bps, this after a slew of analyst came out with positive comments leading up to Microns results next week. Again the price action today seems to differ from the positive analyst commentary.  It tells of a market that is not as positive on Micron as the analysts.

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Thoughts On Roku

Roku shares just continue to melt higher, up by nearly 11 percent this afternoon and are getting a boost after Needham said the recent Disney/Fox deal would be a positive for Roku. Noting that Roku might be able to negotiate its typical 20 percent revenue share for Disney’s new streaming product.  Additionally, it was said Roku could benefit should Disney’s sport and entertainment service take away from viewership from Netflix or Youtube.

I couldn’t disagree with this more. Roku is not in a position to negotiate anything from a company like Disney, in fact, Disney could very well decide to not to launch on Roku’s platform should Roku try to negotiate a 20 percent revenue share. Disney does not need Roku because Disney could simply work out a deal with Amazon, Alphabet, or Apple, or make a deal directly with TV makers like Samsung and have the Disney app pre-installed on every TV made like Netflix and bypass Roku altogether. Roku is doing nothing special on its platform. Roku needs players like Netflix, YouTube, and Disney on their platform. In fact Disney already has a streaming service on the Roku platform, one that I’m very familiar with, it requires a log-in from your cable provider.  Disney would likely demand a discount or a deal on pare with Netflix or YouTube, whom Roku now makes no money on, and does not expect too, as I have mentioned in some previous articles.

Roku is a commoditized product, it is not an ecosystem. Roku has a tremendous amount of competition in Chromecast, Fire, and Apple TV, and Smart TV’s. Readers here no my stance on streaming media, and the On-Demand Generation, it is the future, but it is the content providers that win, not the distributors like cable companies, or the media device makers.

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We noted on December 4 Alphabet looked close to a bottom, and indeed it seems that was close to the bottom because shares have now rallied by nearly 6 percent then. Meanwhile, Amazon and Facebook have surged by almost 5 and 4 percent, respectively.


GOOGL data by YCharts

That’s It for Today.

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Michael Kramer and the Clients of Mott Capital own shares of  $DIS $NFLX $GOOGL

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Tags: #technology #chips #nvidia #micron #GOOGLE #roku #sp500

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