Roku Inc (NASDAQ:ROKU) shares jumped almost 10% after the TV streaming platform announced a new partnership with Amazon Ads, which will create the largest authenticated connected TV (CTV) footprint in the US.
The integration makes Amazon’s demand-side platform (DSP) Roku’s primary platform for addressable CTV ad buying.
The deal provides logged-in reach to roughly 80 million US households, more than 80% of the country’s CTV market, according to ComScore.
The collaboration enables advertisers to run targeted campaigns across major streaming services, including The Roku Channel, Prime Video, and other platforms available on Roku and Amazon Fire TV devices, as well as third-party apps such as Disney+, Paramount+, and Tubi.
The partnership is built on a custom identity resolution system that allows Amazon DSP to recognize viewers who are logged into Roku devices.
According to the companies, this allows advertisers to target the same viewer across different apps and devices, offering more consistent audience reach and improved frequency management.
In early tests, advertisers reportedly reached 40% more unique viewers using the same budget and reduced ad repetition by nearly 30%.
‘Huge boost’
Analysts at Wedbush see the partnership as a major catalyst for Roku’s growth in the CTV space and validation of its long-term strategy.
“We had expected a partnership to develop, and this new partnership now lends credence to our thesis that Roku has several growth drivers at its disposal to achieve its 2025 EBITDA guidance and 2026 target for positive operating income, despite economic uncertainty,” the analysts wrote.
Wedbush believes the integration is a strategic move that could help Roku attract a larger share of shifting ad budgets, particularly those moving away from traditional linear television.
“Roku is well-positioned within the relatively safe CTV space as it ramps platform revenue diversification,” the analysts noted.
CTV spending is expected to remain relatively resilient as the broader ad market has been impacted by macroeconomic headwinds and tariff uncertainty. Furthermore, analysts expect Free Ad-Supported Streaming TV (FAST) channels to be especially well-positioned.
“Among CTV advertising, budgets for FAST should have a slight advantage over AVOD channels,” Wedbush wrote. “With its new Amazon partnership, Roku should not only be insulated on CPMs and ad demand, it will likely drive growth.”
Wedbush also pointed to Roku’s strategic use of user data and platform improvements as further reasons to remain bullish.
“We remain confident in Roku’s ability to create opportunities in this environment and exploit its position as one of the leading SmartTV brands domestically with a treasure trove of user data,” the analysts wrote.
“Despite the macro pressure, we think investors will reward the company for taking a balanced approach as it expands internationally, enhances its platform capabilities, and improves The Roku Channel’s ad capabilities, all while maintaining expense discipline to drive free cash flow.”
Roku shares traded up 9.6% at about $82 in early trade on Monday.