In this piece, we will take a look at the five best video game stocks to buy. For an industry primer and more stocks, do take a look at 13 Best Video Game Stocks to Buy Now.
5. Take-Two Interactive Software, Inc. (NASDAQ:TTWO)
Number of Hedge Fund Holders: 66
Take-Two Interactive Software, Inc. (NASDAQ:TTWO) is an American company with a host of development studios in its portfolio. These are responsible for some very popular games, such as the Grand Theft Auto lineup developed by Rockstar Games. The company is headquartered in New York, New York.
Take-Two Interactive Software, Inc. (NASDAQ:TTWO) is the strongest candidate to successfully develop a metaverse, due to its existing game lineup offering a great platform for metaverse expansion. The company’s RP modification for the GTA franchise is already taking the first step in this direction, and GTA V, despite being a decade old, has sold close to 170 million units worldwide.
Goldman Sachs increased Take-Two Interactive Software, Inc. (NASDAQ:TTWO)’s share price target to $165 from $131 in October 2022, as it stated that headwinds are already priced into the stock. Insider Monkey took a look at 895 hedge fund portfolios for their Q2 2022 holdings and discovered that 66 had held a stake in Take-Two Interactive Software, Inc. (NASDAQ:TTWO).
Out of these, Andreas Halvorsen’s Viking Global is Take-Two Interactive Software, Inc. (NASDAQ:TTWO)’s largest investor. It owns 1.9 million shares that are worth $245 million.
4. Activision Blizzard, Inc. (NASDAQ:ATVI)
Number of Hedge Fund Holders: 84
Activision Blizzard, Inc. (NASDAQ:ATVI) is a video game company that develops and sells games through its Activision, Blizzard, and King franchises. The firm develops video games for personal computers, gaming consoles, and mobiles. It is headquartered in Santa Monica, California.
Activision Blizzard, Inc. (NASDAQ:ATVI)’s Call of Duty gaming title is one of the most popular titles in the world, and it takes the third place for the most sales after Super Mario and Tetris through having sold a whopping 425 units in its lifetime. Over the course of its lifetime, Call of Duty has raked in Activision Blizzard, Inc. (NASDAQ:ATVI) a cool $30 billion in sales.
Activision Blizzard, Inc. (NASDAQ:ATVI) is currently in the process of being acquired by Microsoft Corporation (NASDAQ:MSFT), and the deal is under intense regulatory scrutiny due to fears that Microsoft might limit Call of Duty to the Xbox and prevent PlayStation users from playing the game. Insider Monkey’s June quarter of 2022 survey of 895 hedge funds revealed that 84 had invested in Activision Blizzard, Inc. (NASDAQ:ATVI).
Activision Blizzard, Inc. (NASDAQ:ATVI)’s largest investor is Warren Buffett’s Berkshire Hathaway which owns 68 million shares that are worth $5.3 billion.
3. NVIDIA Corporation (NASDAQ:NVDA)
Number of Hedge Fund Holders: 84
NVIDIA Corporation (NASDAQ:NVDA) is one of the largest semiconductor firms in the world, and it designs and sells graphics processing units that are used by gamers to run heavy duty games. The company is headquartered in Santa Clara, California, the United States.
NVIDIA Corporation (NASDAQ:NVDA)’s GPUs lead the market when it comes to discrete units. These are standalone products that are vastly more powerful than the dedicated GPUs that come alongside processors, and they are used by all gamers and content makers due to their processing capabilities. During Q1 2022, NVIDIA Corporation (NASDAQ:NVDA) held a 21% share of this market, higher than its primary rival in the space, AMD.
NVIDIA Corporation (NASDAQ:NVDA) also holds an 80% share of the PC gaming market, and its products also power the Nintendo Switch – one of the most popular handheld gaming consoles in history. 84 out of the 895 hedge funds polled by Insider Monkey during Q2 2022 had invested in the company.
NVIDIA Corporation (NASDAQ:NVDA)’s largest investor is Ken Fisher’s Fisher Asset Management which owns 7.5 million shares that are worth $1.1 billion.
2. Advanced Micro Devices Inc. (NASDAQ:AMD)
Number of Hedge Fund Holders: 87
Advanced Micro Devices Inc. (NASDAQ:AMD) is an American semiconductor manufacturer and seller. Its graphics processing units (GPUs) are used by gamers to run video games on their personal computers, and the firm also sells processors and GPUs for gaming consoles such as Sony’s PlayStation.
Advanced Micro Devices Inc. (NASDAQ:AMD) became the latest chip company to suffer from a weakening personal computing environment, as it announced in October 2022 that it will miss revenue guidance for PC sales in its third quarter. However, the long term outlook for the company is still secular, simply due to the expected growth in global personal and enterprise computing trends, believes its chief executive officer Dr. Lisa Su.
To add credence to this fact, Advanced Micro Devices Inc. (NASDAQ:AMD)’s shares are currently trading at price to earnings ratio of 15x, which is significantly lower than historic ratios of 20x and 30x. Jefferies kept a $135 price target for the company in October 2022, as it stated that the revenue miss from PC is already reflected in AMD’s stock price due to year to date losses in the share price. By Q2 of 2022 end, 87 out of the 895 hedge funds polled by Insider Monkey had owned a stake in the company.
Advanced Micro Devices Inc. (NASDAQ:AMD)’s largest investor in our database is Ken Fisher’s Fisher Asset Management which owns 25 million shares that are worth $1.9 billion.
1. Microsoft Corporation (NASDAQ:MSFT)
Number of Hedge Fund Holders: 258
Microsoft Corporation (NASDAQ:MSFT) is one of the largest technology companies in the world, and it is responsible for designing and selling the popular Xbox video game console and peripherals such as the HoloLens. The firm is headquartered in Redmond, Washington.
Microsoft Corporation (NASDAQ:MSFT) has one of the strongest portfolios in the technology industry, and it holds strong positions in the gaming, cloud computing, and productivity markets. The firm commanded 50% of the U.S. gaming market as of September 2022, and its Xbox One gaming platform has sold close to 59 million units in its lifetime.
Microsoft Corporation (NASDAQ:MSFT) is also currently in the process of acquiring Activision Blizzard, and if the deal goes through, then the firm will bring the highly popular Call of Duty platform under its wing. The deal will also provide Microsoft Corporation (NASDAQ:MSFT) with a strong video game development arm, which will complement its Xbox gaming console.
As this year’s second quarter ended, 258 out of the 895 hedge funds polled by Insider Monkey had bought Microsoft Corporation (NASDAQ:MSFT)’s shares.
Out of these, Ken Fisher’s Fisher Asset Management is Microsoft Corporation (NASDAQ:MSFT)’s largest investor. It owns 28 million shares that are worth $7.3 billion.
Diamond Hill Capital Management mentioned the company in its Q2 2022 investor letter. Here is what the fund said:
“The recent market environment has enabled us to initiate positions in some high-quality names that have sold off indiscriminately and are trading at prices we haven’t seen in quite some time. Microsoft Corporation (NASDAQ:MSFT) is one example. Microsoft’s stock price declined amid the broader selloff of technology companies. This presented an opportunity for us to purchase shares at an attractive discount to our estimate of the intrinsic value. We expect the business to continue generating strong revenue growth and benefiting from operating leverage. Microsoft’s cloud computing services business, Azure, is also generating robust growth, confirming its competitive positioning.”
Disclosure: None. You can also take a look at the 10 Best Cyclical Stocks for Inflation and 14 Best Financial Stocks To Invest In.
