The live streaming market size is expected to increase by US$20.64 billion, reflecting a CAGR of ~16.6% over 2024 and 2029, as per Technavio. The significant use of smartphones and constant internet connectivity allows users to easily stream content, resulting in market expansion. Furthermore, technological advancements such as AI and VR continue to enhance user experiences, further bolstering the market's momentum.
Pivoting to Next-generation Streaming 2.0
After 4 years of experimentation among the legacy global diversified media companies, S&P Global believes that 2025 can be an inflection point in the broader industry's multi-year transition to streaming from linear TV. The scaling of advertising on streaming is expected to be a critical component for growth in profitability. Most of the streaming services don't have enough subscribers on ad-tiers to attract advertising dollars, mainly those advertising budgets that are departing linear TV, says the firm.
Mainly for 2025, the firm expects companies to announce international JVs and domestic bundling arrangements. Why? These strategies can help the scaling up of streaming services, manage operating expenses through sharing infrastructure costs (mainly in second-tier international markets), and reduce churn.
As per BDO, media companies and those organizations providing streaming services have increased their content libraries in a bid to attract new customers. Over the past few years, several media companies and streaming providers focused on customer attraction, targeting to get as many new subscribers as possible. The streaming platforms continued to churn out new material, resulting in a content boom. Now, the companies are focused on prioritizing customer retention as they reassess the quality of their content to ensure that it addresses demand.
BDO expects that most major streaming platforms are expected to increase their spending on content by less than 10% over the upcoming few years. The broader streaming industry continues to invest in podcasts. However, since the podcast space remains crowded, differentiating new products is expected to remain critical in 2025 to fuel demand.
As the broader sector evolves, media companies and streaming platforms need to revamp their strategies to reap the benefits of opportunities and address challenges, like subscribers sharing credentials and customer retention. BDO opines that these companies are required to look for ways to improve revenues, either by increasing the service fees or adding ad-free tiers.
Our Methodology
To list the 12 Best Streaming Service Stocks to Buy According to Analysts, we sifted through several online rankings and chose companies catering to the broader streaming services sector. Next, we chose the ones that analysts view as Strong Buy stocks and see upside to. Finally, the stocks were arranged in ascending order of their average upside potential, as of February 14. We also mentioned the hedge fund sentiment around each stock, as of Q3 2024.
At Insider Monkey we are obsessed with 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).
Why The Trade Desk Inc. (TTD) Crashed Last Week?
A large array of computer screens and tech equipment representing the technology company's self-service cloud-based platform.
The Trade Desk, Inc. (NASDAQ:TTD) operates as a technology company, empowering the buyers of advertising. With the help of its self-service, cloud-based platform, ad buyers can create, manage, and optimize digital advertising campaigns. With the help of its platform, the company allows advertisers to target certain audiences with ads on streaming platforms, CTV, and digital video services. Streaming television (also termed CTV) can be a long-term growth driver for the company. KeyBanc analyst Justin Patterson upped the company's price target to $142 from $140, keeping an "Overweight" rating on The Trade Desk, Inc. (NASDAQ:TTD)'s stock.
Talking about the big picture, KeyBanc expects that ramps in CTV, retail media, audio, and OpenPath can result in creating a multi-year growth vector. Elsewhere, analyst Brian Pitz from BMO Capital gave a "Buy" rating on The Trade Desk, Inc. (NASDAQ:TTD)'s stock. The analyst opines that the company is well-placed in the ever-evolving and growing CTV market, which is regarded as a significant growth driver. The Trade Desk, Inc. (NASDAQ:TTD) is anticipated to continue to gain inventory access in this space, cementing its long-term growth potential.
In December, the company undertook a reorganization to accelerate opportunities throughout CTV, retail media, identity, supply chain optimization, and audio. With leading advertisers pivoting to premium scalable channels in contrast to the limitations of user-generated content, there is a significant long-term growth opportunity. In 2025 and beyond, The Trade Desk, Inc. (NASDAQ:TTD) remains well-placed to help clients take full advantage of data-driven advertising on the premium internet. Rowan Street Capital, an investment management company, released its Q4 2024 investor letter. Hereis what the fund said:
“The Trade Desk (TTD): Investment Initiated: March 2020
Overall TTD ranks 1st on our list of the best streaming service stocks to buy according to analysts. While we acknowledge the potential of TTD as an investment, our conviction lies in the belief that some deeply undervalued AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for a deeply undervalued AI stock that is more promising than TTD but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
