In this article, we will be looking at the 5 best gaming stocks to buy now. To see our detailed analysis of the video game industry, you can go directly to see the 11 Best Gaming Stocks to Buy Now.
5. Electronic Arts Inc. (NASDAQ: EA)
Number of Hedge Fund Holders: 44
Electronic Arts Inc. (NASDAQ: EA) is a developer of games, content, and services for gaming consoles, computers, phones, and tablets across the globe. Some of its brands include Battlefield, The Sims, Need for Speed. The company ranks 5th on our list of the best gaming stocks to buy now.
Electronic Arts Inc. (NASDAQ: EA) announced on June 9th that Battlefield 2042 is set to launch by October 22nd, and on June 23rd, the company also mentioned its acquisition of Playdemic from WarnerMedia for $14 billion. In its fiscal fourth quarter of 2021 report, Electronic Arts Inc. (NASDAQ: EA) had an EPS of $1.23, beating estimates by $0.18. The company’s revenue was $1.49 billion, up 22.84% year over year and beating estimates by $95.28 million. It has a gross profit margin of 73.46% and the stock has gained 0.35% in the past 6 months and 3.29% year to date.
By the end of the first quarter of 2021, 44 hedge funds held stakes in Electronic Arts Inc. (NASDAQ: EA) worth roughly $14.3 billion. This is compared to 50 hedge fund holders in the previous quarter with a total stake value of approximately $10.5 billion.
Artisan Partners, a high value-added investment management firm, mentioned Electronic Arts Inc. (NASDAQ: EA) in its first-quarter 2021 investor letter. Here’s what they said:
“Video game publisher Electronic Arts (EA) has recently experienced muted performance relative to peers. The company is expanding its moat as COVID-19 pulled forward gamer engagement in 2020 and early 2021. While we expect current growth rates will slow, the long-term value of the company’s user community has increased. EA’s net cash balance sheet and industry leadership fit well with our philosophy and process, and while the recently acquired Codemasters and GLUU Mobile will draw down cash, the balance sheet remains strong and the deals further EA’s mobile growth strategy. We believe our stake in EA represents how we can think opportunistically to build an eclectic, idiosyncratic portfolio to deliver value over the long term.”
4. Zynga Inc. (NASDAQ: ZNGA)
Number of Hedge Fund Holders: 47
Zynga Inc. (NASDAQ: ZNGA) is a gaming company providing social game services in the US and internationally. It develops and operates social games as live services on mobile platforms like the Apple iOS and Google Android operating systems. The company ranks 4th on our list of the best gaming stocks to buy now.
This May, Zynga Inc. (NASDAQ: ZNGA) was upgraded to Buy at BofA after the company released its strong first-quarter earnings. The price target for the company is not $13.5 at the firm. The company also beat bookings and revenue estimates in Q1, leading to it gaining in the aftermath. Zynga Inc. (NASDAQ: ZNGA) also announced this May that it would be acquiring Chartboost for $250 million and gain the firm’s audience of over 700 million monthly users and 90 billion monthly ad auctions in the process. In the first quarter of 2021, Zynga Inc. (NASDAQ: ZNGA) had an EPS of $0.13, beating estimates by $0.04, while its revenue was $680.3 million, up 68.49% year over year, and beat estimates by $40.21 million. The company has a gross profit margin of 58.85% while the stock has gained 9.22% in the past 6 months and 10.34% year to date.
By the end of the first quarter of 2021, 47 hedge funds held stakes in Zynga Inc. (NASDAQ: ZNGA) worth roughly $11.4 billion. This is compared to 52 hedge fund holders in the previous quarter with a total stake value of approximately $10.02 billion.
Artisan Partners Limited Partnership, a high value-added investment management firm, mentioned Zynga Inc. (NASDAQ: ZNGA) in its fourth-quarter 2020 investor letter. Here’s what they said:
“We also added to our position in Zynga. Our multiyear investment campaign in Zynga has been based on a new management team’s ability to drive steady growth in the company’s base portfolio of games, expand margins, reinvigorate the new game development pipeline and use its strong balance sheet to acquire complementary games and studios. Shares have been pressured in recent quarters, presumably because of investor concerns about the company’s moderating growth rate and Apple’s pending new privacy policy which will make it more difficult for Zynga to both efficiently acquire new players and sell advertising in its games. We believe the company has multiple growth levers it can pull in the periods ahead, including the rollout of new games, acquisitions, further penetration into international markets and entry into new gaming categories, to name a few. Furthermore, our research suggests the Apple privacy policy change is manageable for larger mobile game developers such as Zynga. Given our strong conviction in the profit cycle, we used recent weakness to add to our position.”
3. Bilibili Inc. (NASDAQ: BILI)
Number of Hedge Fund Holders: 53
Bilibili Inc. (NASDAQ: BILI) is a provider of online entertainment services in China. The company’s platform has content like video services, mobile games, value-added services, and ACG-related comic and audio content. It ranks 3rd on our list of the best gaming stocks to buy now.
This May, Bilibili Inc. (NASDAQ: BILI) rose in light of strong Q1 results where the company beat top and bottom-line estimates and offering promising Q2 guidance. For the second quarter, Bilibili Inc. (NASDAQ: BILI) is expecting between $657 million to $673 million in revenue. This April, the stock was upgraded to Outperform at Credit Suisse as well. In the first quarter of 2021, Bilibili Inc. (NASDAQ: BILI) had an EPS of -$0.39, beating estimates by $0.06. The company’s revenue was $604.71 million beat estimates by $21.66 million and represented an 85.43% growth year over year. It has a gross profit margin of 23.91% and the stock has gained 46.48% in the past 6 months and 32.53% year to date.
By the end of the first quarter of 2021, 53 hedge funds held stakes in Bilibili Inc. (NASDAQ: BILI) worth roughly $30.1 billion. This is compared to 46 hedge fund holders in the previous quarter with a total stake value of approximately $30.8 billion.
2. Activision Blizzard, Inc. (NASDAQ: ATVI)
Number of Hedge Fund Holders: 76
Activision Blizzard, Inc. (NASDAQ: ATVI) is a developer of interactive entertainment content and services in the US, Europe, the Middle East, Africa, and the Asia Pacific. The company ranks 2nd on our list of the best gaming stocks to buy now.
This June, MoffettNathanson upgraded Activision Blizzard, Inc. (NASDAQ: ATVI) to Buy with a $124 price target indicating a 34% upside, in light of the company’s stable cash flows and net cash position. The stock was also upgraded to Outperform at BMO Capital markets this May. In the first quarter of 2021, Activision Blizzard, Inc. (NASDAQ: ATVI) had an EPS of $0.84, beating estimates by $0.15. The company’s revenue was $2.07 billion, up 35.74% year over year, and beat estimates by $285.55 million. Activision Blizzard, Inc. (NASDAQ: ATVI) has a gross profit margin of 72.79% and has gained 2.97% in the past 6 months and 6.35% year to date.
By the end of the first quarter of 2021, 76 hedge funds held stakes in Activision Blizzard, Inc. (NASDAQ: ATVI) worth roughly $35.8 billion. This is compared to 81 hedge fund holders in the previous quarter with a total stake value of approximately $37.3 billion.
Cooper Investors, an investment management firm, mentioned Activision Blizzard, Inc. (NASDAQ: ATVI) in their first-quarter 2021 investor letter. Here’s what they said:
“The portfolio established a position in video game publisher Activision Blizzard. As a watchlist company we have followed Activision for several years. As a reminder the role of the watchlist is to allow us to focus on a select group of companies where we seek to observe important signals around either value latency, industry trends or management behaviour that portend attractive investment propositions.
Technology can often play a disruptive role in content, however video games are a clear beneficiary of technology, both in terms of more immersive and realistic gaming experiences as well as the monetisation opportunities this creates.
In order to benefit from these trends, video game publishers must be owners of unique IP. Activision Blizzard fits this bill perfectly boasting a portfolio which includes franchises such as Call of Duty, World of Warcraft and Diablo just to name a few.” (Click here to see the full text)
1. Amazon.com, Inc. (NASDAQ: AMZN)
Number of Hedge Fund Holders: 243
Amazon.com, Inc. (NASDAQ: AMZN) is a tech giant operating in the retail sale of consumer products and subscriptions in the US and internationally. The company’s Prime Gaming segment offers users free games, in-game loots, and a free subscription on Twitch.tv. It ranks 1st on our list of the best gaming stocks to buy now.
On June 29th, Amazon.com, Inc. (NASDAQ: AMZN) acquired SmartLess rights for about $60-80 million, with new episodes due to appear on Amazon Music and Wondery this August. This month, Switzerland’s leading telecom company Swisscom also picked Amazon.com, Inc. (NASDAQ: AMZN) as its partner in public cloud provision. In the first quarter of 2021, Amazon.com, Inc. (NASDAQ: AMZN) had an EPS of $15.79, beating estimates by $6.15. The company’s revenue of $108.52 billion was up 43.82% year over year and beat estimates by $3.89 billion. The stock has gained 5.87% in the past 6 months and 8.21% year to date, while Amazon.com, Inc. (NASDAQ: AMZN) also has a gross profit margin of 40.48%.
By the end of the first quarter of 2021, 243 hedge funds held stakes in Amazon.com, Inc. (NASDAQ: AMZN) worth roughly $50.4 billion. This is compared to 273 hedge fund holders in the previous quarter with a total stake value of approximately $51.5 billion.
See also Top 10 Video Gaming Stocks To Buy Now and 15 Largest Gaming Companies In The World.
