These 3 gaming stocks are poised to climb the leaderboards
gaming has become a trendy pastime, allowing gamers to seamlessly connect and communicate with each other across the globe with the click of a few buttons. The industry was growing steadily until it experienced a huge boom resulting from lockdowns during COVID-19.
After the record number of online gamers in 2020 and 2021, the industry has evolved significantly, changing the landscape and attracting serious attention.
For example, tech giant Apple AAPL is reportedly developing a game console, Meta Platforms FB owns widely acclaimed VR game company Oculus, and Microsoft MSFT just made a massive acquisition this year of the leading video game publisher. Activision Blizzard ATVI.
To capitalize on the future benefits of this industry, let’s take a look at three stocks that currently have video games and related operations and analyze how they are shaping up to benefit from this rapidly growing industry.
Nintendo NTDOY is a world leader in game development and publishing. A few of its beloved game franchises include household names such as Donkey Kong, Pokemon, The Legend of Zelda and Super Mario Brothers.
The Nintendo Switch, the company’s flagship console, was a huge hit across the world. In December 2021, the console’s unit sales exceeded 103 million, becoming its best-selling home console of all time in just four years after its release and knocking its famous Wii out of the top spot.
NTDOY’s games revenue saw a remarkable increase from 2020 to 2021, jumping 37% and raking in $16.5 billion, boosted by Nintendo’s library of 29 titles that sold over 1 million copies. NTDOY has a busy lineup of video game releases for this year, including The Legend of Zelda – Breath of the Wild 2; the first installment ranks fifth among video games of all time and is one of Nintendo’s all-time bestsellers. The 2022 lineup also includes many other hit classics, such as new episodes in the Pokemon series and the beloved Super Mario Brothers which should bring substantial sales.
Nintendo has seen its current consensus estimate trend for the full year rise 6.2% to $3.90 per share in the past 60 days, and next year’s trend is up nearly 12% at $3.99 per share. The company enjoys a Zacks No. 2 ranking (buy) and an average EPS of 86% over the past four quarters. Additionally, Nintendo is going beyond just video games, using the reach of theme parks and character-related merchandise to draw attention to its brand.
Image source: Zacks Investment Research
With well-established operations, a highly anticipated lineup of 2022 video games, and an extensive library of games that includes all-time classics, the company is poised to fully benefit from the industry’s meteoric growth. NTDOY would be a great stock for investors looking to ride the gaming wave.
Microsoft MSFT burst onto the gaming scene with their legendary Xbox gaming console in 2001. Two legendary franchises they own are Halo and Minecraftand by acquiring Activision Blizzard in January, it further bolstered its library of games.
Last year, MSFT launched its next-gen Xbox X | S consoles that came out of the gate with some serious performance upgrades over its previous Xbox One. In January this year, MSFT is estimated to have shipped nearly 12 million units of the new consoles, which shows the popularity and well-received nature of the product.
Microsoft intends to release all Activision Blizzard games on its Xbox Game Pass, a service with over 25 million subscribers that costs $9.99 per month. ATVI’s games library, which has more than 400 million monthly active players, is expected to boost Microsoft’s games revenue, a metric that rose 8% in the second quarter. Xbox hardware revenue grew 4% in the second quarter, and overall gaming revenue grew 33% year-over-year from 2020 to 2021. Additionally, the company grew ventured into cloud gaming, a space that is quickly becoming very competitive and lucrative.
Zacks’ consensus estimate for current-year earnings rose nearly 2% to $9.31 per share, and for next year it rose 3% to $10.67 per share. action. Microsoft is currently a Zacks Rank #3 (Hold) and has an average four-quarter EPS surprise of almost 11%. Additionally, the combination of Microsoft’s Project xCloud with its Xbox Game Pass should improve its already competitive position in the gaming industry.
Microsoft Corporation Price, Consensus, and EPS Surprise
Microsoft Corporation price-consensus-eps-surprise-chart | Microsoft Corporation Quote
Microsoft’s future in gaming is very bright. With a new library of games established on its innovative Xbox Game Pass, a cutting-edge new console, and pushing the boundaries of cloud gaming, it’s easy to see why MSFT would be an outstanding stock that provides broad exposure to the gaming industry. video.
Nvidia NVDA, the world leader in visual computing technology, is the latest gaming-related action that I believe offers a great advantage in the gaming space. Although NVDA does not actively develop video games, cutting-edge technology of the company is found in the vast majority of modern gaming PCs and other gaming platforms.
The chip giant reported record annual gaming revenue in FY22, up 61% to $12.5 billion. Its GeForce RTX 3050 desktop GPU boosted its stellar gaming sales in Q4, which saw massive demand due to its low $250 price tag. Nvidia has announced more than 160 gaming and GeForce-based laptop designs and has integrated Nvidia Reflex technology to deliver low-latency gaming, an attribute that gamers are looking for heavily when making buying decisions.
The current full-year earnings estimate has risen 7.5% to $5.55 in the past 60 days, and next-year’s estimate has risen 7.8% to $6.37 $ per share. NVDA is currently a Zacks Rank #2 and boasts an average EPS surprise of 7% over the past four quarters. Additionally, in his latest quarterly report, NVDA’s CEO said he is seeing exceptional demand for its technology and the company is propelling advancements in gaming, one of today’s most impactful areas. today.
Image source: Zacks Investment Research
Nvidia is very well positioned to reap the rewards of the booming industry. Record gaming revenue, a new line of cutting-edge gaming laptops, and strong demand for the company’s groundbreaking technology are all significant factors that make NVDA a solid portfolio choice for investors who want a stake. Plus, NVDA is a more diverse way to get gaming exposure without fully committing to a game-only development company.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.