One of the favorite stocks of Cathie Wood and Ark Funds is Roku Inc (NASDAQ:ROKU). Here’s what Wood had to say this weekend about the streaming hardware and platform company.

What Happened: Roku shares were down 23% on Friday after a second quarter earnings report that saw revenue and earnings per share both miss Street estimates. The company also withdrew full-year revenue guidance due to a weakness in advertising budgets.

“In our view, the third-quarter guidance is conservative, as Roku reported more than $1 billion in ad commitments during the year’s upfront selling season, representing approximately 16% of upfront CTV ad spend and 5% of total upfront add spend,” Wood said.

Wood said the new third quarter guidance suggests the company sees “little-to-no revenue capture from the scatter market” for the upcoming television year.

“Although macroeconomic headwinds are compelling advertisers to tighten their ad budgets, we believe ad spend on CTV should continue to grow as consumers defect from linear TV.”

Wood said data from Nielsen shows U.S. consumers aged 18 to 49 spending 50% of their time watching television through streaming services, but CTV ad budgets are only 22% of the total TV ad budgets.

“As the #1 streaming platform by hours streamed in the U.S., Canada and Mexico, Roku should continue to lead the advertising shift from linear to digital TV.”

Related Link: The Roku Earnings Disaster, This Feels Like A Tivo To Me 

Why It’s Important: Roku is one of the largest stock positions from Ark Funds, and the ETF company added to its position Friday on the dip from the earnings miss. Ark Funds added over 469,000 shares across three ETFs on Friday.

Here is a look at how Roku stacks up in three Ark Invest ETFs:

Ark Innovation ETF (NYSE:ARKK): third-largest stock position, $745.1 million, 7.79% of assets

Ark Next Generation Internet ETF (NYSE:ARKW): second-largest stock position, $124.0 million, 8.38% of assets

Ark Fintech Innovation ETF (NYSE:ARKF): 26th largest stock position, $9.0 million, 0.95% of assets

Together, the three ETFs hold nearly $1 billion in Roku shares.

“We believe Roku’s long-term growth story remains intact, particularly because consumers continue to adopt CTV and abandon linear TV,” Wood said.

Ark Invest has a price target of $605 by 2026 for Roku shares.

ROKU Price Action: Roku shares closed down 23% to $65.52 on Friday, versus a 52-week range of $62 to $238.35.