We recently published a list of 7 Best Gaming Stocks to Buy Now. In this article, we’ll take a look at where Take-Two Interactive Software Inc. (NASDAQ:TTWO) stands against the other best gaming stocks to buy now.
A brief look at the gaming industry
The gaming industry not only provides entertainment, but also stimulates innovation in technology and creativity. The global gaming market was estimated at $249.55 billion by 2022. Looking ahead, the market is expected to grow at a compound annual growth rate (CAGR) of 13.1% over the period 2023-2030, reaching USD 665.77 billion by the end of the forecast period. This expansion is driven by several key trends that are reshaping the way games are developed and played.
The growing popularity of cloud gaming, the introduction of VR and AR technologies, and the increasing interest in online gaming are some of the key trends driving the market growth.
The increasing interest in esports and online gaming tournaments is expected to boost consumer spending on games and contribute to market growth. Esports features teams and individual players competing in various video games. In July and August, the first ever Esports World Cup took place in Riyadh, Saudi Arabia, attracting over 1,500 players and offering a huge prize pool of $60 million. The event lasted eight weeks and included 23 competitions across 22 different video games, such as Call of Duty and Fortnite. This tournament is part of Saudi Arabia’s Vision 2030 initiative, aimed at diversifying the country’s economy.
Rise of generative AI
Another important trend is the integration of generative AI into gaming. This technology makes it possible to create dynamic storylines and realistic characters that can interact with players in a more lifelike way. Experts believe this will increase player engagement by personalizing experiences based on individual actions. The potential for AI to create entire game worlds opens up new avenues for creativity in game design.
According to Bernard Marr, a world-renowned futurist and author of “Generative AI in Practice: 100+ Amazing Ways Genative Artificial Intelligence is Changing Business and Society,” generative AI is revolutionizing video game development by providing tools to help developers create compelling content create. , realistic visuals and immersive gameplay experiences. Marr believes that generative AI can help developers create massive, unique gaming environments through procedural generation, enabling dynamic gameplay experiences that change with each session.
Additionally, this technology can generate music and sound effects that adapt to in-game events, enriching the overall player experience. By automating tasks like creating quests and writing dialogue, generative AI can help developers improve storytelling and design. Marr thinks that while generative AI won’t replace human creativity, it can speed up game development and reduce costs, which is a big step forward for the gaming industry.
Methodology
To create our list of the seven best gaming stocks to buy now, we used Finviz and Yahoo’s stock screeners to find the biggest gaming companies. We also reviewed our own rankings, searched ETFs and consulted various online resources. From an initial pool of more than twenty gaming stocks, we focused on the top seven stocks most favored by institutional investors. Data on hedge fund sentiment around each stock comes from Insider Monkey’s database of 912 elite hedge funds. The seven best gaming stocks to buy now are ranked in ascending order based on the number of hedge funds that had stakes in them as of the second quarter of 2024.
Why do we care what hedge funds do? The reason is simple: our research shows that we can outperform the market by imitating the best stock picks from the best hedge funds. Our quarterly newsletter strategy selects 14 small- and large-cap stocks each quarter and has returned 275% since May 2014, beating the benchmark by 150 percentage points (see more details here).
A close-up of a hand holding a game controller, demonstrating the company’s interactive entertainment.
Take-Two Interactive Software Inc. (NASDAQ:TWO)
Number of hedge fund holders: 48
Take-Two Interactive Software Inc. (NASDAQ:TTWO) is a prominent American video game holding company based in New York City. It specializes in developing, publishing and marketing interactive entertainment products to consumers worldwide. The company operates through well-known brands such as Rockstar Games, 2K, Private Division and Zynga, which focus on various gaming platforms including consoles, PCs and mobile devices. The company’s wide range of games are delivered via physical stores, digital downloads, online platforms and cloud services.
The company reported solid performance in the first quarter of fiscal 2025, with total net bookings increasing to $1.22 billion, up 1% from the prior year. Net bookings from recurring consumer spend accounted for 83% of total net bookings. Top contributors to net bookings included popular titles such as NBA 2K24, Red Dead Redemption and Grand Theft Auto Online. The company’s net sales increased 4% year over year to reach $1.34 billion. Recurring consumer spending increased by 3% and accounted for 82% of total revenue.
Take-Two Interactive Software Inc. (NASDAQ:TTWO) is committed to engaging players through exciting new game releases and updates. The company is focused on improving its core franchises while seeking new growth opportunities. On September 6, 2024, the company announced the launch of NBA 2K25, the latest version of its popular basketball video game series. This new version is available on multiple platforms including PlayStation 5, PlayStation 4, Xbox Series X|S, Xbox One, Nintendo Switch and PC. NBA 2K25 introduces significant gameplay improvements powered by ProPLAY technology, with more than 9,000 new animations derived from real NBA footage. The game also features exciting new modes in MyTEAM and The City, along with returning favorites and new role-playing experiences in MyCAREER and MyNBA, giving players a richer and more immersive basketball gaming experience.
As of October 7, TTWO stock is trading at $152.21, and analysts have a consensus buy recommendation on the stock. The average one-year price target set by analysts is $185.00, indicating a potential upside of 21.54% from the current price. This presents a promising investment opportunity for those looking to capitalize on the future of interactive entertainment.
Take-Two Interactive Software Inc. (NASDAQ:TTWO) has a strong portfolio of renowned franchises with a loyal customer base, consistently driving sales and engagement. The company’s commitment to providing regular updates and new content helps maintain player interest and satisfaction, thus ensuring a steady stream of revenue from both new releases and ongoing content. This strategic approach allows the company to capitalize on the growing video game market.
TTWO is one of the best gaming stocks to buy right now. According to Insider Monkey’s second database of more than 900 hedge funds, 48 hedge funds had stakes in Take-Two Interactive Software Inc. (NASDAQ:TTWO).
In short, TTWO is in 4th place one of the best gaming stocks you can buy right now. While we recognize TTWO’s growth potential as an investment, our belief lies in the belief that AI stocks hold greater promise for delivering higher returns in a shorter time frame. If you’re looking for an AI stock that’s more promising than TTWO but trades at less than five times earnings, check out our report on the cheapest AI stocks.
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Disclosure: None. This article was originally published on Insider Monkey.
