Roku Inc.'s shares surged 7% in morning trading on Wednesday, as investors cheered an optimistic analyst note that reiterated a "Buy" rating and predicted the streaming platform's imminent acquisition at a significant premium.

Needham & Company's analyst Laura Martin expects Roku to be "purchased for a large premium within the next 12 months," driven by intensifying competition in the connected TV advertising space following Walmart's $2.3 billion acquisition of Vizio.

According to Martin, Roku stands out as the "only scaled CTV platform that can be purchased," positioning it as a prime target for tech giants and retailers seeking to bolster their streaming and advertising capabilities. The analyst highlighted Roku's unique strengths, including its vast 85 million household user base, valuable privacy-compliant data from over 4 hours of daily viewing per home, and pricing power through The Roku Channel's 50% revenue share model.