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10 Epic Video Game Stocks to Buy Now

In this article we present the list of 10 Epic Video Game Stocks to Buy Now. Click to jump straight to the top 5 Epic Video Game Stocks to Buy Now.

Electronic Arts Inc. (NASDAQ:EA), Roblox Corporation (NYSE:RBLX), and Take-Two Interactive Software, Inc. (NASDAQ:TTWO) are a few epic video game stocks that the smart money is buying up in droves.

The video game industry is booming, nearly doubling in value to a projected $236 billion from just $120 billion in 2017. While the industry’s growth rate is slowing somewhat, it’s nonetheless expected to expand by another $85 billion by 2026.

PC and console gaming get the bulk of the attention among the mainstream video game press and hardcore gamers, but it’s actually the social and casual gaming segment of the industry that has been largely responsible for its explosive past and projected growth. That segment of the industry alone is expected to be worth $243 billion by 2026, greater than the entire industry’s size as of this year.

Asian countries are among the biggest gaming hotbeds, with China leading the pack in terms of gaming revenue generated by country at $49.3 billion in 2021. Japan, South Korea, and India all rank within the top 6 biggest gaming markets, while the U.S., U.K, France, Germany, Mexico, and Russia round out the top 10.

Industry consolidation has driven some of the biggest gaming companies in the world off this list in recent years, as both Zynga and Activision Blizzard, which consistently ranked as top gaming stocks in the past, were acquired by Take-Two Interactive and Microsoft respectively. At least in terms of console and PC gaming, that consolidation and the cost of making so-called AAA games is making it all but impossible for new entrants to compete.

With game development costs rising on console and PC, those costs are being pushed onto consumers, with the average game price now pushing $70. That’s seen as bad news for that segment of the industry, as cash-strapped consumers struggle to keep up with the newest games. With the average cost of an AAA game now approaching $80 million, developers have little choice but to charge a premium for their products.

In contrast, the average mobile game costs as little as $100,000 to $150,000 and are typically free-to-play, giving smaller developers the chance to create a game relatively on par with anything else out there and attract a large audience if their game is a good one. In-game ads, subscriptions, and the sale of in-game items allow mobile developers to recoup their costs and then some.

Despite the industry’s promising future, video game stocks have taken a big hit this year alongside the broader market. The VanEck Video Gaming and eSports ETF is down 36% in 2022 as many video game stocks have been driven down to multi-year lows. Thus, it’s a great time to consider adding some video game stocks to your portfolio on the cheap.

With that in mind, we’ve turned to smart money managers to see which video game stocks they have the most faith in heading into the second half of 2022, and given the long-term nature of many of their portfolios, the long haul.

Barone Firenze / Shutterstock.com

Our Methodology

The following video game stocks are ranked based on hedge fund sentiment. We follow a select group of hedge funds because Insider Monkey’s research has uncovered that their consensus stock picks can deliver outstanding returns.

All hedge fund data is based on the exclusive group of 900+ funds tracked by Insider Monkey that filed 13Fs for the Q2 2022 reporting period.

Epic Video Game Stocks to Buy Now

10. Playstudios Inc (NASDAQ:MYPS)

Number of Hedge Fund Shareholders: 8

 

Electronic Arts Inc. (NASDAQ:EA), Roblox Corporation (NYSE:RBLX), and Take-Two Interactive Software, Inc. (NASDAQ:TTWO) are some of the most well-known gaming companies in the world that smart money investors have added to their portfolios. A lesser known name with a smaller following among hedge funds is Playstudios Inc (NASDAQ:MYPS).

Playstudios Inc (NASDAQ:MYPS) publishes free-to-play games for mobile devices and on social media platforms. It primarily focuses on slot and casino games, including titles like MGM Slots Live – Vegas Casino and POP! Slots Live Vegas Casino. The bulk of the company’s revenue, which came in at $15 million in September 2022, comes from a handful of its casino games. Playstudios’ titles failed to gain much traction during the pandemic despite the mobile game audience growing by leaps and bounds, which is why the stock has fallen by 65% since June 2021.

Hedge funds were bailing on Playstudios Inc (NASDAQ:MYPS) during Q2, as there was a 56% drop in the number of money managers long the stock. David Einhorn’s Greenlight Capital was one of the most notable sellers, unloading its entire MYPS stake of 963,018 shares during the quarter.

9. GameStop Corp. (NYSE:GME)

Number of Hedge Fund Shareholders: 18

GameStop Corp. (NYSE:GME) operates more than 4,000 retail outlets that sell video game hardware, software, accessories, and merchandise, in addition to prepaid cards and other gadgets. The majority of the company’s stores are located in the United States.

GameStop has suffered mightily in recent years due to the gaming industry’s shift to digital sales. Leading titles like FIFA 22 and Grand Theft Auto V generated the majority of their sales through digital channels last year, as opposed to physical copies, which is not only impacting GameStop’s new game sales and foot traffic, but also cannibalizing the used game market, which is where the company has traditionally made the bulk of its money.

Furthermore, GameStop’s bet on NFTs appears to be going belly up, as revenue from its NFT venture GameStop Wallet, which launched in May, has slowed to a trickle. The broader gaming industry also appears to be turning its back on NFTs after initially showing enthusiasm over the technology’s potential.

GameStop Corp. (NYSE:GME) and hedge funds haven’t exactly been on speaking terms for the most part in recent quarters given the very public short squeeze by retail investors that bludgeoned several notable funds in early 2021. Hedge fund ownership of the stock has doubled since hitting an all-time low at the end of Q3 2021, but nonetheless remains less than half what it was in early 2016.

Bireme Capital marveled at the fact meme stock GameStop Corp. (NYSE:GME) was one of its few short positions not to have fallen in the first half of 2022, given its deteriorating fundamentals and hefty valuation, saying this about the company in its Q2 2022 investor letter:

“Amazingly, GameStop Corp. (NYSE:GME) is one of our only short positions to not fall in 2022. The stock trades at an $11.5b market cap, exceeding its pre-pandemic peak by billions of dollars. This is despite the fact that revenue is down 30% from the peak, gross margins are down 1500 bps, and the company has generated a negative free cash outflow of $700m in the last four quarters (we had to double check that number because it is so high).

Wall Street has consistently revised downward their estimates of Gamestop’s profitability, making its stock price stability in 2022 even more perplexing. Analysts currently estimate an EBITDA loss of around $400m, markedly worse than their estimates as of 2/3/22 of a loss of $60m. Their recently launched NFT marketplace will do nothing to fix their core business and comes about a year too late to be relevant in the NFT space. Instead, we see this as another example of a meme stock company hoping it can ape its way into a new business model, utilizing the popularity of the stock to drive new lines of business. We are not optimistic, and think the $11.5b market cap drastically overestimates the capability of Gamestop to pivot into something more profitable. We find it unlikely that Gamestop books a GAAP profit ever again.”

8. Playtika Holding Corp. (NASDAQ:PLTK)

Number of Hedge Fund Shareholders: 23

Playtika Holding Corp. (NASDAQ:PLTK) is an Israel-based company that publishes a wide range of free-to-play mobile games, including casino and bingo games like Bingo Blitz, hidden object games like Pearl’s Peril and multiplayer combat games like Just Fall.

Playtika Holding Corp. (NASDAQ:PLTK) shares are down by 46% this year, with the biggest drop occurring in early May when the company’s Q1 results and full-year outlook came up short of expectations. While net income per share more than doubled year-over-year, it still fell short of estimates, while revenue grew by just 5.9% to $676.9 million and also missed estimates. A few of the company’s games had strong quarters, including June’s Journey and Solitaire Grand Harvest, which grew revenue by 30.4% and 41.7% respectively.

Hedge fund ownership of Playtika Holding Corp. (NASDAQ:PLTK) has been steady since the company’s $1.88 billion IPO in the first quarter of 2021. The same can’t be said for the company’s stock, which has gone pretty much straight downhill, losing 70% since its public debut. Richard Mashaal’s Rima Senvest Management owned 6.56 million PLTK shares on June 30.

7. SciPlay Corporation (NASDAQ:SCPL)

Number of Hedge Fund Shareholders: 25

SciPlay Corporation (NASDAQ:SCPL) is a mobile and social games developer that has attracted a small stable of loyal smart money shareholders. The company’s games primarily revolve around casino and other casual games like slots, bingo, solitaire, and backgammon, some of which can be played against other players around the world.

SciPlay Corporation (NASDAQ:SCPL) performed well during the pandemic, but there are concerns that the company’s core social casino market has matured, with its CAGR standing at just 2.7%. SciPlay has been outperforming the broader social casino market, but how much more market share it can attain is a lingering question. The company pulled in $160.1 million in revenue in Q2, along with earnings of $0.23 per share, down a cent from a year earlier.

Other than a brief blip in the second quarter of 2021, ownership of SciPlay Corporation (NASDAQ:SCPL) among the hedge funds tracked by Insider Monkey has remained steady for nearly two years. Of that select group of funds, Arnaud Ajdler’s Engine Capital has held the largest stake in SCPL for the past three quarters.

6. Sony Group Corporation (NYSE:SONY)

Number of Hedge Fund Shareholders: 26

Closing out the first half of the list is gaming giant Sony Group Corporation (NYSE:SONY). While the Japanese company’s gaming division it its biggest, pulling in $24.4 billion in revenue last year, Sony also has numerous other segments, including music, financial services, imaging solutions, and electronic products.

Chip shortages have impacted the sales of Sony’s PlayStation 5 console, which is looking to replicate the success of the PS4, which sold over 117 million units worldwide to easily win the eighth generation console wars over Nintendo’s Wii U and Microsoft’s Xbox One (which it more than doubled in sales). It has a considerable amount of work to do in the current generation, as Nintendo’s Switch, which had a three year headstart, has already sold over 100 million units.

Between 26 and 29 hedge funds have been long Sony Group Corporation (NYSE:SONY) for 10 of the past 12 quarters, with just a brief decline in the middle of 2021. Panayotis Takis Sparaggis’ Alkeon Capital Management unloaded nearly all of its 5.7 million Sony shares during Q2, holding just 55,000 at the end of the quarter. The fund’s former position was the largest held by any of the funds tracked by our database as of March 31.

As noted, chip shortages have dogged Sony’s PS5 sales and contributed to the company landing on Aristotle Capital Management’s biggest detractors list for Q1. The fund nonetheless remains bullish on Sony Group Corporation (NYSE:SONY), as detailed in its Q1 2022 investor letter:

“Sony, maker of the PlayStation videogame console, was a leading detractor for the quarter. After a strong year in 2021, a shortfall in PlayStation 5 sales due to continued semiconductor shortages has dampened new console unit sales. Although there are likely to be continued limitations on the supply of components in the short term, consumer demand remains strong, and upcoming releases of major titles such as Horizon Forbidden West and Gran Turismo 7 are likely to further enhance demand. While Sony continues to manage supply-chain headwinds, the company has also again demonstrated its ability to build on the fundamental strength of its business across various segments. During the quarter, Sony acquired Bungie, a U.S.-based videogame developer known for the Destiny franchise and live game services; completed its initial equity investment in Japan Advanced Semiconductor Manufacturing, a foundry service subsidiary of Taiwan Semiconductor Manufacturing Company (TSMC); and acquired Brazilian music label Som Livre. Lastly, Sony announced a partnership with Honda Motor (NYSE:HMC) where the two companies expect to combine Honda’s expertise in manufacturing vehicles with Sony’s proficiency in imaging, sensing, telecommunication and network technologies to develop and commercialize electric vehicles. We feel these strategic actions demonstrate Sony’s ability to continue to improve on its market positions across its business segments with a long-term, forward-looking approach.”

In the second part of this article we’ll see where gaming titans Electronic Arts Inc. (NASDAQ:EA), Roblox Corporation (NYSE:RBLX), and Take-Two Interactive Software, Inc. (NASDAQ:TTWO) rank among world-class hedge funds.

Click to continue reading and see the 5 Epic Video Game Stocks to Buy Now.

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Disclosure: None. 10 Epic Video Game Stocks to Buy Now is originally published at Insider Monkey.

AI, Tariffs, Nuclear Power: One Undervalued Stock Connects ALL the Dots (Before It Explodes!)

Artificial intelligence is the greatest investment opportunity of our lifetime. The time to invest in groundbreaking AI is now, and this stock is a steal!

AI is eating the world—and the machines behind it are ravenous.

Each ChatGPT query, each model update, each robotic breakthrough consumes massive amounts of energy. In fact, AI is already pushing global power grids to the brink.

Wall Street is pouring hundreds of billions into artificial intelligence—training smarter chatbots, automating industries, and building the digital future. But there’s one urgent question few are asking:

Where will all of that energy come from?

AI is the most electricity-hungry technology ever invented. Each data center powering large language models like ChatGPT consumes as much energy as a small city. And it’s about to get worse.

Even Sam Altman, the founder of OpenAI, issued a stark warning:

“The future of AI depends on an energy breakthrough.”

Elon Musk was even more blunt:

“AI will run out of electricity by next year.”

As the world chases faster, smarter machines, a hidden crisis is emerging behind the scenes. Power grids are strained. Electricity prices are rising. Utilities are scrambling to expand capacity.

And that’s where the real opportunity lies…

One little-known company—almost entirely overlooked by most AI investors—could be the ultimate backdoor play. It’s not a chipmaker. It’s not a cloud platform. But it might be the most important AI stock in the US owns critical energy infrastructure assets positioned to feed the coming AI energy spike.

As demand from AI data centers explodes, this company is gearing up to profit from the most valuable commodity in the digital age: electricity.

The “Toll Booth” Operator of the AI Energy Boom

  • It owns critical nuclear energy infrastructure assets, positioning it at the heart of America’s next-generation power strategy.
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AI. Energy. Tariffs. Onshoring. This One Company Ties It All Together.

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AI needs energy. Energy needs infrastructure.

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This company has its finger in every pie—and Wall Street is just starting to notice.

Wall Street is noticing this company also because it is quietly riding all of these tailwinds—without the sky-high valuation.

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This company is completely debt-free.

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It also owns a huge equity stake in another red-hot AI play, giving investors indirect exposure to multiple AI growth engines without paying a premium.

And here’s what the smart money has started whispering…

The Hedge Fund Secret That’s Starting to Leak Out

This stock is so off-the-radar, so absurdly undervalued, that some of the most secretive hedge fund managers in the world have begun pitching it at closed-door investment summits.

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  • The AI infrastructure supercycle
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You simply won’t find another AI and energy stock this cheap… with this much upside.

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Disruption is the New Name of the Game: Let’s face it, complacency breeds stagnation.

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A New Dawn is Coming to U.S. Stocks

I work for one of the largest independent financial publishers in the world – representing over 1 million people in 148 countries.

We’re independently funding today’s broadcast to address something on the mind of every investor in America right now…

Should I put my money in Artificial Intelligence?

Here to answer that for us… and give away his No. 1 free AI recommendation… is 50-year Wall Street titan, Marc Chaikin.

Marc’s been a trader, stockbroker, and analyst. He was the head of the options department at a major brokerage firm and is a sought-after expert for CNBC, Fox Business, Barron’s, and Yahoo! Finance…

But what Marc’s most known for is his award-winning stock-rating system. Which determines whether a stock could shoot sky-high in the next three to six months… or come crashing down.

That’s why Marc’s work appears in every Bloomberg and Reuters terminal on the planet…

And is still used by hundreds of banks, hedge funds, and brokerages to track the billions of dollars flowing in and out of stocks each day.

He’s used this system to survive nine bear markets… create three new indices for the Nasdaq… and even predict the brutal bear market of 2022, 90 days in advance.

Click to continue reading…