Roblox (RBLX): An ARK Heavyweight Where Analysts See Significant Upside Potential

RBLX +2.48%

Roblox Corp. (NYSE:RBLX) is among the top 10 stocks to buy from Cathie Wood’s stock portfolio. With $736 million value, Roblox is the fifth-largest position in ARK Investment Management’s 13F equity portfolio, as of September 30. However, the fund has reduced steadily through the quarter, decreasing its holdings by close to 22% to finish at 5.31 million shares.

As of November 27, analyst opinion remains strongly favourable, with 70% of analysts covering it assigning a Buy or equivalent rating. The consensus 1-year median price target also indicates a solid 62% upside potential.

Among the analysts who have recently published a positive update is Morgan Stanley’s Matthew Cost. Encouraged by Roblox Corp.’s (NYSE:RBLX) launch of a new advertising unit, the analyst reiterated his Overweight rating and $170 price target on November 13. The analyst noted that this initiative strengthens Roblox’s long-term monetization potential.

Cost highlighted that Rewarded Video ads not only give the company a shot at a substantial opportunity worth an estimated $3 billion, but can also lead to meaningful margin expansion through sponsored tiles over time. He also argued that if the company can effectively integrate ads, it can increase the monetization of user engagement, which is currently largely unmonetized.

Roblox Corp. (NYSE:RBLX) provides entertainment products and services. The Company designs and develops a wide range of online games, including 3D and tutorial games for kids, teens, and adults.

While we acknowledge the potential of RBLX as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you’re looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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Disclosure: None. This article is originally published at Insider Monkey.