The darkest cloud at Roku (NASDAQ: ROKU) burst on Wednesday, and thankfully for shareholders it turned out to be a piñata. Roku stock soared 18% for the trading day, moving sharply higher after the company announced it had entered into a multi-year contract with Alphabet's (NASDAQ: GOOG) (NASDAQ: GOOGL) Google to keep its YouTube app on the streaming platform. The deal also includes the return of YouTube TV to Roku's offerings.
Coming together a day before the original deal was set to expire isn't exactly a surprise. YouTube had a lot to lose, and Roku had even more to lose.
The rally doesn't necessarily have to end here. Even after Wednesday's surge the stock finds itself trading 48% below the all-time high it hit this summer. Put another way, the stock would have to nearly double to establish a new peak. Can Roku get there in the year ahead, trouncing the market in the process? The answer is complicated, but potentially promising.
Source Fool.com