Wall Street’s record-setting rally is due for a reality check, according to the latest report from Stifel’s Barry Bannister and Thomas Carroll.

The company’s reported adjusted earnings before interest, taxes, depreciation, and amortization of $17.9 million for the quarter, a 29% decline from last year and below Wall Street’s call for $19.4 million. Adjusted Ebitda margin fell to 21% from 29% a year ago.

At least that’s what Wall Street’s fear gauge suggests. The VIX plunged to its lowest point of 2025 on Wednesday, just above 14 — roughly 30 percent below its long-run average of 20 — while the S&P 500 hit a record high for the second day in a row.

Wall Street’s investment landscape is quietly shifting. Following increased volatility in both the U.S. stock market and the crypto market, more institutions and high-net-worth investors are moving away from the strategy of simply holding assets and waiting.

Wall Street is not too hot on the stock due to Roku's history of weak profitability. The company needs to prove it can profitably benefit from growth in digital advertising, but that is the outlook management is offering for 2026. Assuming the company succeeds in improving margins, the stock should move higher over the next 18 months or so.

U.S. stocks rose after a rally spurred by hopes for lower U.S. interest rates wrapped around the world. The S&P 500 rose 0.3% Wednesday.