5 Epic Video Game Stocks to Buy Now

3. Electronic Arts Inc. (NASDAQ:EA)

Number of Hedge Fund Shareholders: 47

Electronic Arts Inc. (NASDAQ:EA) is one of the most prolific, and at times controversial, game developers and publishers in the world. The company has a slew of popular gaming franchises, including its various EA Sports games, Need for Speed, Star Wars, The Sims, and BioWare-developed RPGs like Mass Effect and Dragon Age.

EA also has a growing stable of mobile games, which hit $1.2 billion in revenue for the 12 months ended June 30, up 49% year-over-year. The company’s EA Play subscription service had 13 million members at the end of 2020. EA grew net bookings by 21% year-over-year to $7.52 billion during its fiscal 2022 ended June 30. Net bookings are expected to hit about $8 billion for the company’s current fiscal year. EA also pays out dividends thanks to its growing free cash flow, which could hit $1.5 billion this year. EA shares currently yield 0.66%.

Slightly less than half the number of hedge funds are long Electronic Arts Inc. (NASDAQ:EA) as of June 30 as there were four years earlier. At that time, several funds owned EA stakes valued at over $500 million. The largest stake is now held by Jim Simons’ Renaissance Technologies, which is one of the few funds that has maintained its position in EA over the years, owning 1.5 million shares at the end of Q2 worth $183 million.

Mayar Capital is bullish on the heightened engagement Electronic Arts Inc. (NASDAQ:EA)’s games have been enjoying according to the fund’s Q2 2022 investor letter:

“Electronic Arts is also developing as we would expect. The business enjoyed strong engagement last year with players of EA games spending 20% more time than even during 2020, helped by the delayed sales of the PS5 console. A potentially important development is the ongoing negotiation between EA and FIFA regarding the licensing of the FIFA brand for the EA football game. Strongly worded public statements have been slung from both parties as part of the negotiation process, but this could certainly be an opportunity for EA.”