In this artice, we will look at the 8 Worst AdTech Stocks To Buy Now.
Overview of the AdTech Industry
The adtech industry includes an array of products and companies, including supply-side platforms (SSPs), demand-side platforms (DSPs), data management platforms (DMPs), ad exchanges, and more. According to data by Allied Market Research, the global adtech market stood at $748.2 billion in 2021, and is anticipated to reach $2.9 trillion by 2031. This translates to a compound annual growth rate of 14.7% between 2022 and 2031. Experts believe that the industry is well-poised for growth, with the global supply-side platform segment (SS) reaching a market size of $117.32 billion by 2033. Technological advancements, supportive government policies, and higher consumer demand are all factors expected to drive this growth.
In addition, changing trends such as the exponentially growing use of advanced technology like artificial intelligence and machine learning, growing Internet and digital penetration, growth of social media platforms and better prospects for the gaming industry, are all responsible for this growth. In-app advertising, interactive ads, and higher use of connected TV (CTV) have become the dominant trends in the AdTech industry, driving growth and change.
Trends in programmatic advertising are also expected to improve, allowing the demand-side platform software market size to reach $120.1 billion by 2033. The demand for improved targeting and measurement capabilities for online ads is also an important factor to consider in this growth. While the AdTech industry seems promising on its own, the increasing use of artificial intelligence across all platforms is making it even more appealing.
Recent Happenings in the AdTech Sector
Despite its positive trends, the AdTech industry in the US is experiencing certain headwinds, the most prominent being Google’s highly profitable AdTech business going to trial. The Department of Justice and a coalition of states filed a lawsuit against the company in 2023, claiming that the company is illegally dominating the digital ad marketplace, leveraging its market power to suppress competition and innovation. A trial began this month, and the Department of Justice rested its case against its parent company for operating a monopoly in the AdTech market. The tech giant earned more than $200 billion through the placing and selling of ads in 2023, arguing that the reason behind this success is the “effectiveness” of its services. Prosecutors, however, claim that the company has used its dominance to shun rivals.
In addition, smaller AdTech firms are raising concerns over Google’s cookies alternative, Privacy Sandbox. While its ad business is under global scrutiny, the company is making adapting to Privacy Sandbox a critical necessity. However, regulators in the US and UK are of the opinion that the Privacy Sandbox would give Google the lion’s share of control over the digital advertising market, which might negatively affect competition.
Potential technology development delays seem to be negatively affecting smaller AdTech firms, changing the course of the industry. While conclusive results aren’t out, such changes are highly likely to alter AdTech industry trends.
With these changing trends in mind, let’s look at the 8 worst AdTech stocks to buy now.
8 Worst AdTech Stocks To Buy Now
Our Methodology
To list the 8 Worst AdTech Stocks To Buy Now, we used the Finviz screener, ETFs, and rankings to first identify 15 AdTech stocks. Next, we narrowed our list by selecting the 8 stocks that have high short interest but also a high number of hedge fund investors. Finally, these stocks were ranked in ascending order of their short interest. We have also added the number of hedge funds holding each stock as a secondary metric.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
8 Worst AdTech Stocks To Buy Now
8. Salesforce, Inc. (NYSE:CRM)
Short Interest: 1.25%
Number of Hedge Fund Holders: 117
Salesforce, Inc. (NYSE:CRM) provides customer relationship management (CRM) technology. Its Customer 350 platform encompasses marketing, sales, service, commerce, collaboration, artificial intelligence, integration, automation, analytics, and a lot more. Salesforce Inc. forms connections between customer data across applications, systems, and devices to develop a complete customer view. It also allows third parties to leverage its platform and developer tools to develop additional applications and functionality that run on its platform.
Customers use its sales offering to monitor progress and leads, store data, recognize opportunities, derive information from analytics and relationship intelligence, and deliver invoices, quotes, and contracts. Salesforce’s (NYSE:CRM) service offering allows a bridge between service agents and customers, allowing customers to resolve their normal issues with recommendations and predictions. Salesforce Inc. (NYSE:CRM) uses a subscription model to provide services to businesses across the globe.
The company is currently transforming its Agentforce platform, enabling it to build robust autonomous agents for sales and marketing, automate workflows, and embed agents in the flow of work. The Data Cloud is the primary force behind these performance capabilities. Through Data Cloud, the company is providing a high-performance data lake to its customers, bringing its business and customer data together. Customers can use Data Cloud to federate and connect to all of their other Data Cloud, bringing everything together to deliver accurate AI.
This is one of the primary reasons why Data Cloud is the fastest-growing organic product in teh company’s history. It is set to be the fastest product to touch $1 billion, and is expected to maintain the same pace henceforth, highlighting its productivity. In Q2 fiscal 2025 alone, Data Cloud processed 2.3 quadrillion records with 110% platform consumption growth year over year. Paid data consumers grew by 130% year over year in the same quarter. In addition, the number of customers with a spending power of more than $1 million per annum has doubled already.
Overall, Salesforce Inc. (NYSE:CRM) is running on a strong revenue, cash flow, and CRPO margin. The company exceeded analyst expectations in Q2 fiscal 2025, with cash flow growth of $892 million in the quarter and 10% year-over-year growth. Supported by these positive profitability trends, the company is expected to have revenue of around $37.3 billion to $38 billion in fiscal 2025. This translates to a growth of 8%-9% year over year. Salesforce Inc. (NYSE:CRM) also expects a solid subscription and support revenue growth of approximately 10% year over year in constant currency.
Ithaka US Growth Strategy stated the following regarding Salesforce, Inc. (NYSE:CRM) in its Q2 2024 investor letter:
“Salesforce, Inc. (NYSE:CRM) is the largest pure-play cloud software company, holding a leading market share in customer relationship management applications and a top-five market share position in the company’s other clouds (Marketing, Service, Platform, Analytics, Integration, and Commerce). The company’s software subscription term-license model differs from the traditional perpetual-license software model in two respects: (1) the software is hosted on centralized servers and delivered over the Internet, as opposed to traditional enterprise software that is loaded directly onto customers’ hard drives or servers; and (2) the revenue model is subscription-based, typically charging monthly fees per user as opposed to charging one-time licensing fees.”
7. Meta Platforms, Inc. (NASDAQ:META)
Short Interest: 1.31%
Number of Hedge Fund Holders: 219
Meta (NASDAQ:META) ranks seventh on our list of the worst adtech stocks to buy now, and is one of the leaders in the domain. The company builds technology that allows people to connect, find communities, share, and grow their businesses. Its products help people do all of this by connecting through personal computers, mobile devices, virtual reality (VR) and mixed reality (MR) headsets, and wearables. Advertisers also use the company’s apps to expand their customer base and connect with customers
Meta (NASDAQ:META) operates through two primary segments: Reality Labs (RL) and the Family of Apps (FoA). The RL segment includes mixed, augmented, and virtual reality-associated consumer software, hardware, and content. In contrast, the FoA segment includes globally famous apps: Instagram, Facebook, Messenger, WhatsApp, and Threads.
According to the company’s estimations, more than 3.2 billion people use at least one of Meta’s (NASDAQ:META) apps daily. This growth is especially strong in the US, where WhatsApp now serves more than 100 million monthly active users. Year-over-year growth across Instagram, Facebook, and Threads is also strong, both in the US and across the globe. Threads is also on the path to hit 200 million monthly active users, thereby establishing itself as another major social app. These trends are primarily driven by the company’s shift in focus towards users aged between 18 and 29.
Jumping on the AI bandwagon, Meta (NASDAQ:META) has plans to significantly modify its services for advertisers by employing artificial intelligence in the future. Advertisers who previously came to the company with a particular pre-selected target age group, interest, or geography would no longer need to do so, as Meta’s (NASDAQ:META) AI-enabled ad systems would soon be better equipped to predict target segments. In the future, Meta (NASDAQ:META) expects to hand over the task of generating creatives for advertisements to AI as well, leaving advertisers to only contact the company with a budget and a vision.
On September 10, Meta (NASDAQ:META) was initiated with a Buy at DA Davidson. Its median price target of $524.6 implies an upside of 9.60%. 219 hedge funds hold stakes in the stock, with Citadel Investment Group holding the highest stake, worth $6.26 billion.
Alger Focus Equity Fund stated the following regarding Meta Platforms, Inc. (NASDAQ:META) in its Q1 2024 investor letter:
“Meta Platforms, Inc. (NASDAQ:META) operates the world’s largest social network, with over 3 billion monthly active users across its platform. The company generates revenue predominantly from advertising, which accounts for over 95% of its total revenue, evenly split between North American and international markets. During the quarter, shares contributed to performance following the release of strong fiscal fourth quarter operating results, with revenues and earnings surpassing analyst estimates. The better-than-expected revenues were attributed to strong advertiser demand and Al-driven ad improvements. Moreover, the company materially raised its fiscal first quarter sales and earnings guidance above analysts’ estimates, buoyed by continued strong advertiser demand trends and enhancements to Reels. Advantage+. Click-to-message, and Shop Ads. Further, management noted that ongoing investment in Al is enhancing user engagement and advertiser returns through improved targeting and measurement. Separately, Meta authorized a new share repurchase plan representing approximately 5% of its market capitalization and announced the initiation of its first dividend, implying an approximate 0.4% yield.”
6. Pegasystems Inc. (NASDAQ:PEGA)
Short Interest: 1.56%
Number of Hedge Fund Holders: 27
Pegasystems (NASDAQ:PEGA) develops, licenses, markets, hosts, and supports enterprise software to build agility in organizations and businesses and make them more adaptable to change. The company’s Pega Infinity software portfolio connects customers and enterprises across channels in real time.
The company’s platform and applications cross with several software markets, application development platforms, and the Vertical-Specific Software market of packaged applications and industry solutions. Some of the application development platforms include Digital Process Automation, Customer Relationship Management, Business Process Management, Workflow, and Dynamic Case Management. The application development platforms include Robotic Process Automation, Multi-experience Development Platforms, Decision Management, and Business Rules Management Systems. Pegasystems offers a multitude of services and support through three groups: Global Client Success, Pega Academy, and Global Service Assurance groups.
The company is on the path to accomplishing its financial goals while delivering breakthrough technology innovation. It holds a competitive advantage in the industry due to its center at architecture and systematic approach to generative AI and statistical AI. The company’s newest offerings, especially the Pega GenAI Blueprint, encompass many of these advancements. Over the last months, it created tens of thousands of Pega Blueprints, identifying growth opportunities and creating momentum for Pega Cloud, which plays a role in monetization. According to the company, Pega Blueprints is essentially altering how it engages, sells, and delivers to its clients.
Pegasystems (NASDAQ:PEGA) has taken a Gen-AI approach to its improvements. It has added GenAI capabilities to assist its customers. IT and business teams who plan and design their application through the platform can leverage these capabilities to expedite the design phase, use AI to stimulate best practice thinking in applications, and inject best practices and ideas. Similarly, developers can use the Pega GenAI Autopilot to turn Blueprints into live applications, providing contextual guidance and assistance throughout the development journey. The company has also introduced the Pega Gen AI Socrates, a GenAI tutor that can conduct personalized and tailored dialogues with its students to help them learn Pega skills.
Apart from groundbreaking innovations and improvements, the company is running on solid financials. Free cash flow reached $218 million in the first half of 2024, growing by 119% year over year and making a record for the company. The growth was driven by two primary factors: continued improvement in sales execution and continued focus on operational discipline. The stock is trading at a forward P/E of 23.63 at a 0.46% premium to its sector. It received a Buy from William Blair, and JMP Securities upgraded the stock to a Buy. Its current price target of $67.29 implies an upside of 25.58% from current levels. 27 hedge funds hold stakes in the stock as of Q2 2024. Pegasystems (NASDAQ:PEGA) takes the sixth spot on our list of the worst adtech stocks to buy now.
5. HubSpot, Inc. (NYSE:HUBS)
Short Interest: 1.71%
Number of Hedge Fund Holders: 80
HubSpot (NYSE:HUBS) is an adtech company that provides a customer platform for businesses to grow and connect. Its unified platform offers prime connection for customer-facing teams. The platform includes artificial intelligence-powered engagement hubs, a connected ecosystem with more than 1,500 app marketplace integrations, a smart customer relationship management product (CRM), a community network, and educational content.
The company’s engagement hubs include Sales Hub, Marketing Hub, Operations Hub, Service Hub, Content Management System (CMS) Hub, and Commerce Hub. These hubs allow companies to engage and attract clients through the customer lifecycle. HubSpot’s Smart CRM is its primary layer of operations. It brings customer data to AI, powering the customer platform with unified customer profiles and tools to manage and govern teams and business processes. It specializes in relating and selling to mid-market business-to-business (B2B) companies. HubSpot (NYSE:HUBS) functions on a subscription basis.
The company is on the path to profitability. Its Q2 2024 revenue grew by 21% year over year in constant currency, and its total customers increased to 228,000 individuals across the globe. 11,200 net customer additions in Q2 drove the company’s customer growth. Its pricing improvements and product enhancements have led the company to the low end of the market. The company has also made it easy to get started with HubSpot (NYSE:HUBS), removing friction and streamlining the checkout process so consumers can make clear decisions about the seats and functionality of their choice. HubSpot (NYSE:HUBS) introduced its pricing model changes in March, lowering the price point to get started, removing seat minimums, and creating a core seat for customers who wish to edit CRM records. In turn, it recorded solid expansion trends with a multi-point net revenue increase in the third month of use. Customers on the new pricing model have the power to purchase precisely what they need, expanding as they go. This is one of the primary reasons behind its increasing popularity.
HubSpot (NYSE:HUBS) is also driving innovation with its Spring Spotlight product launches. As part of its first Spring Spotlight, the company rolled out significant updates to service up and launched Content Hub. Its ultimate goal was to provide an AI-powered content marketing solution to help marketers create and manage content. Public response to this facet has been promising, with the attach rate for Content Hub to Marketing Hub tripling since its launch. It now stands at around 50% for new marketing hub wins. Innovative AI features like AI blogs, content remixes, and brand voice are the primary drivers of the high attach rate.
Renowned brands like TripAdvisor, Morehouse College, and World Wildlife Fund for Nature, are leveraging HubSpot content solutions for growth, highlighting the company’s potential in product innovation and profitability. Hubspot ranks fifth on our list of the worst adtech stocks to buy now.
4. The Trade Desk, Inc. (NASDAQ:TTD)
Short Interest: 2.11%
Number of Hedge Fund Holders: 46
The Trade Desk (NASDAQ:TTD) offers its customers a self-service, cloud-based ad-buying platform where clients can plan, optimize, manage, and measure data-driven digital advertising campaigns. The company’s platform allows clients to undertake integrated campaigns across channels and ad formats, including television (CTV), audio, display, native and social, and digital-out-of-home, on a variety of devices. These may include mobile devices, computers, streaming devices, and television.
The Trade Desk’s (NASDAQ:TTD) platform also offers integrated access to a variety of data sources and omnichannel inventory, along with third-party services. Ad buyers collaborating with the company can use its platform’s integrations with publishers, inventory, and data partners for decision qualities and reach. Its enterprise application programming interfaces (APIs) also allow clients to expand and personalize platform functionality as per their preference. The Trade Desk (NASDAQ:TTD) typically collaborates with advertisers, advertising agencies, and other service providers working for advertisers or agencies.
The company delivered strong growth in Q2 2024, continuing its profitability trends. Revenue grew by 26% to $585 million, significantly surpassing the overall growth rate of the rest of the digital marketing industry. It is on a solid path of growth, success, and profitability, boosted by consistent 20%+ revenue growth year after year for the past several years. These trends make the company likely to outpace the market in the future, supported by significant growth areas such as connected TV.
The Trade Desk (NASDAQ:TTD) is helping advertisers think about efficacy from an out-of-the-box perspective, another reason behind its growing popularity. To help advertisers leverage the premium open Internet, the company has launched Kokai, its most ambitious platform since its inception. Kokai enables clients to employ data about their most loyal group of customers, using it as a starting point for attracting the next group of loyal customers. The platform guides clients in targeting these new customers across the thousands of destinations that make up the premium layer of the open Internet.
Kokai also employs AI to help customers understand the approximately 15 million ad opportunities that crop up every second and the several hundred variables associated with them. These processes can be streamlined according to a company’s particular business growth objectives, further solidifying Kokai’s efficiency. The platform’s early results have been encouraging, with the campaigns holding an incremental reach of more than 70% after moving to Kokai.
Performance metrics across the company have also improved by 25%, helping it unlock performance budgets for several years. This translates to more cost-efficient and precise clients. The company’s profitable business model gives it the flexibility to make investments, continuously driving growth and innovation in the long term. On September 13, Wedbush raised the stock’s price target to $115 from $110. Its current price target of $106.06 implies an upside of 8.43%. The Trade Desk (NASDAQ:TTD) ranks fourth on our list of the 8 worst adtech stocks to buy now.
3. Criteo S.A (NASDAQ:CRTO)
Short Interest: 3.85%
Number of Hedge Fund Holders: 18
Criteo SA (NASDAQ:CRTO) is a France-based company that specializes in digital performance marketing and ranks third on our list of the worst adtech stocks to buy now. The company’s solution comprises the Criteo Engine, its data assets, advertiser and publisher platforms, and access to inventory. The Criteo Engine comprises global hardware and software infrastructure and several machine learning algorithms, such as recommendation, prediction, and bidding. Criteo Engine can deliver advertisements through several marketing channels and formats, such as native advertising banners, display advertising banners, and marketing messages delivered to opt-in emails. These advertisements are delivered on all screens and devices, including mobile web browsers on smartphones and tablets, web browsers on laptops and desktops, and mobile applications. Criteo (NASDAQ:CRTO) operates in around 90 countries and manages operations through a network of more than 30 international offices located in the Americas, the Asia-Pacific region, and Europe.
The company is running on solid financials, focusing on becoming a Commerce Media powerhouse. It recorded double-digital organic growth for the third consecutive quarter. The primary drivers of these positive trends are the company’s efforts to focus on consumers throughout the buyer journey, leverage our unique commerce data assets and AI for growth, and streamline supply-and-demand side relationships.
Criteo (NASDAQ:CRTO) also focuses on establishing partnerships for growth, and has worked with Microsoft to bring high-quality native advertising to commerce audiences. It is now expanding its partnership with Microsoft to its Retail Media suite in a two-fold collaboration. Firstly, the company is set to bring Microsoft Advertising’s substantial demand to its global network of 225 retailers. This will enable them to look into budgets from Microsoft’s 500,000+ advertisers, concurrently expanding the reach and value of their inventories. Secondly, the company was selected by Microsoft to act as its preferred on-site partnership.
Criteo (NASDAQ:CRTO) is working to consolidate the Retail Media supply to its platform, with the retailer’s transition from Microsoft Advertising to Criteo’s platform expected to begin in 2025. The collaboration is expected to solidify the company’s position as an adtech leader, creating a unified access for all media buyers and gaining further competitive edge.
The company also has future growth plans in place, with the aim to increase retail monetization and advertiser outcomes throughout the consumer journey. It is also looking to leverage predictive modeling for privacy-increasing targeting, streamline creative formats and campaign workflows, and product recommendations. Criteo (NASDAQ:CRTO) is also increasing its market share gain in Retail Media, experiencing a 30% year-over-year growth in Q2. It holds a leading market footprint, with around 65% of the top 30 retailers in the Americas and approximately 50% of the top 30 retailers in EMEA. Furthermore, the company is partnering with new retailers in the US, such as Dollar General Corp, Belk, and QVC.
2. Magnite, Inc. (NASDAQ:MGNI)
Short Interest: 6.20%
Number of Hedge Fund Holders: 25
Magnite (NASDAQ:MGNI) is an independent sell-side adtech company that provides tech solutions for the automation of the sale and purchase of digital advertising inventory. The company’s platform boasts services and applications for publishers owning and operating connected television (CTV) channels, websites, applications, and other digital media properties to monetize and manage their inventory. Apart from that, it also offers features to sellers of digital advertising inventory and buyers such as agencies, advertisers, agency trading desks, and demand side platforms (DSPs) looking to buy digital advertising inventory.
Magnite (NASDAQ:MGNI) manages a transparent marketplace that connects sellers and buyers, facilitating automated transaction execution at scale and intelligent decision-making. Its ad server and streaming sell-side advertising platform (SSP) offers CTV sellers an all-encompassing solution for yield monetization and management and streamlining workflow across direct-sold and programmatic video inventory.
The company has strong financials, exceeding its top-line financial guidance in Q2 fiscal 2024. It holds a competitive edge in the CTV market due to its selection as Netflix’s programmatic FSP partner. This collaboration has brought significant momentum to Magnite (NASDAQ:MGNI), making it appealing to new investors and partners alike. Its competitive moat stems from continuous investments in various capabilities and features over the years. Key drivers of its strong CTV performance were the growing programmatic adoption by some of the largest industry players, strong overall ad spend growth, and ad serving strength. Its ad spend grew more than 20% in Q2.
Apart from its Netflix win, Magnite (NASDAQ:MGNI) secured two other highly profitable partnerships: United Airlines and Roku. The company recently announced that it is set to act as the centralized ad platform for in-flight entertainment in United Airlines, showing its continued growth in the commerce media space and programmatic advertising arena. In addition, Magnite (NASDAQ:MGNI) also announced an expansion of its seven-year partnership with Roku in support of powering the new Roku Exchange. Integrating with Magnite (NASDAQ:MGNI) allows the Roku Exchange to connect to the programmatic ecosystem. In addition to connecting the exchange to third-party buyers, Magnite (NASDAQ:MGNI) provides a demand facilitation team and incremental advertising opportunities through its agency and clear line marketplace solutions.
Magnite’s (NASDAQ:MGNI) total revenue grew 7% to $163 million in Q2 2024 as compared to Q2 2023. 25 hedge funds hold stakes in the stock as of Q2 2024. Choice Equities Fund stated the following regarding Magnite, Inc. (NASDAQ:MGNI) in its Q2 2024 investor letter:
“Magnite, Inc. (NASDAQ:MGNI) – Portfolio holding Magnite is worth a deeper dive given the impressive list of customer wins the company has been announcing of late. Streaming players like Roku, Telus, Media Ocean and, most importantly, Netflix have all chosen Magnite to serve as their sole SSP (Supply Side Platform) to sell their ad inventory programmatically. The recent wins (which add to existing relationships with the likes of AMC Networks, DISH Media, Disney Advertising, FOX Corporation, FuboTV, LG Ads Solutions, VIZIO, and Warner Bros. Discovery) highlight the strength of Magnite’s offering within the Connected TV (CTV) value chain as the largest independent – and unbiased – supply-side ad exchange in the world. Though the wins have come in bunches lately, establishing this advantaged competitive position was not something that happened overnight, as CEO Michael Barrett has employed savvy, strategic acquisitions of CTV supply-side peers Telaria (2020), SpotX (2021), and SpringServe (2021) to bolster this position.”
1. Roku Inc. (NASDAQ:ROKU)
Short Interest: 6.94%
Number of Hedge Fund Holders: 35
Roku (NASDAQ:ROKU) primarily operates a television streaming platform. Apart from connecting consumers to streamlining content of their choice, it also allows advertisers to engage customers and content publishers to build and monetize large audiences. The company’s segments are divided into devices and platforms. The devices segment covers licensing arrangements with TV brands and service operators in addition to the sales of audio products, smart home services and products, and streamlining players.
In contrast, the platform segment includes selling digital advertising and distributing streaming services. The company’s digital advertising sales include media and entertainment promotional spending, direct and programmatic video advertising, and similar services. The streaming services distribution, however, includes the sale of premium subscriptions, subscription and transaction revenue shares, and the sale of branded app buttons fixed on remote controls. Roku TV models are available in the United States and certain select countries through the licensing arrangements made with TV OEM brands.
More than 120 million people in the US use the Roku Home Screen, one of the company’s biggest assets that gives it a competitive market advantage. The company’s Q2 fiscal 2024 results recorded around 83.6 million streaming households, undergoing a 14% year over year growth with a sequential net addition of 2 million. This growth was driven by both streaming players and TV. Roku (NASDAQ:ROKU) is also experiencing a positive growth in consumer engagement, with streaming hours increasing by 20% year over year. Its engagement per account across the globe is increasing as well. Streaming hours per streaming household went from 3.8 hours in Q2 2023 to 4.0 hours in Q2 2024.
Apart from the increasing popularity of Roku Home Screen, the company’s investments in development and operations pipeline make it well poised for continued profitability. In fact, these positive factors allowed it to expect an acceleration in platform revenue in 2025. Total net revenue in Q2 fiscal 2024 grew by 14% year over year, touching $968 million. Platform revenue also increased to $824 million, with an 11% year-over-year growth.
These trends were driven by advertising activities and the distribution of streaming services. Streaming services distribution activities increased even faster than the overall platform revenue, primarily because of an increase in subscription prices. In addition, device revenue experienced a 39% year over year growth in Q2, primarily driven by the retail distribution expansion of Roku-branded TVs.
In the US, Roku (NASDAQ:ROKU) holds considerable market advantage and popularity. It stands as the top TV OS by streamed TV units and sales, with each share more than double the next largest operating system. These trends show that the company is on the path to building the lead-in to TV. Roku (NASDAQ:ROKU) is anticipating a strong net revenue of $1.01 billion in the third quarter, with an expected 11% year-over-year growth. It also expects platform revenue to grow by 9% year over year. The company is poised to maintain its strong execution record. It is focusing on its monetization initiatives, leveraging the Roku Home Screen as the TV lead-in, increasing Roku-billed subscriptions, and maximizing ad demand for the platform.
On September 12, Benchmark Co. gave Roku (NASDAQ:ROKU) a Buy rating. Wells Fargo also upgraded Roku (NASDAQ:ROKU) to Equal Weight from Under Weight due to Roku channel growth. As of Q2 2024, 35 hedge funds held the stock, with ARK Investment Management holding the highest stakes, worth $762.09 million.
Overall, ROKU ranks first among the 8 worst adtech stocks to buy now. While we acknowledge the potential of adtech companies, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than ROKU but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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