We recently published a list of Mark Cuban Stock Portfolio: Top 10 Stock Picks. In this article, we are going to take a look at where GameStop Corp. (NYSE:GME) stands against other top stock picks from Mark Cuban’s portfolio.
Mark Cuban is a well-known entrepreneur and television personality, recognized for his diverse business ventures and outspoken presence in the sports and entertainment industries. He was the principal owner of an NBA franchise, the Dallas Mavericks, of which he now serves as a minority owner. Raised in Pittsburgh, Pennsylvania, Cuban showed an entrepreneurial spirit from a young age. At age 12, he sold garbage bags to afford a pair of expensive sneakers after which, at 16, he capitalized on a newspaper strike by transporting newspapers. Later, he enrolled at the University of Pittsburgh before transferring to Indiana University’s Kelley School of Business, where he earned a degree in management in 1981.
Cuban started his career at Mellon Bank, where he developed an interest in technology and networking. After being fired from his sales job in a software retailer, he founded MicroSolutions, a company specializing in system integration and software reselling. Under his leadership, the company flourished, generating over $30 million in revenue before Cuban sold it to CompuServe for $6 million in 1990, netting approximately $2 million after taxes. Cuban’s success continued with Audionet, a company he co-founded in 1995 alongside Todd Wagner. Audionet evolved into Broadcast.com, growing rapidly and generating millions in revenue. In 1999, at the height of the dot-com boom, Yahoo! acquired Broadcast.com for $5.7 billion in stock.
Over the years, Mark Cuban has invested in various industries, including social software, networking, entertainment, sports, and cryptocurrency. He was an early investor in IceRocket, a blog search engine, and backed companies like RedSwoosh, Weblogs, Inc., and Goowy Media. In 2005, he experimented with a new business model for online journalism through Sharesleuth.com and later launched Bailoutsleuth.com for government oversight. Cuban also ventured into film distribution with Magnolia Pictures and invested in Motionloft, a storefront analytics company. His Shark Tank investments since 2011 total nearly $20 million, with mixed success. In 2022, he launched Cost Plus Drugs to lower prescription prices and disrupt the U.S. healthcare industry. His sports ventures include owning the Dallas Mavericks from 2000 until selling a majority stake in 2023. Cuban has also been active in cryptocurrency, accepting Dogecoin for Mavericks merchandise and tickets.
Mark Cuban’s investment philosophy is centered on discipline, frugality, and informed decision-making. He emphasizes “living like a student” in the early years to build a financial cushion, saving at least six months’ income before investing in low-cost index funds. Cuban strongly discourages credit card debt due to high interest rates, advocating for cash or debit card use instead. He also promotes strategic spending by negotiating prices and buying essentials in bulk when discounted. For more experienced investors, Cuban suggests deep expertise in a particular domain and holding cash until a unique opportunity arises, rather than following conventional buy-and-hold strategies. Ultimately, his approach prioritizes financial discipline, smart spending, and long-term investing for steady wealth growth.
The outspoken tech mogul has a well-defined investment strategy focused on generating wealth through smart, long-term decisions. He favors dividend-paying stocks, referring to them as “real-world value generators,” emphasizing their ability to provide steady income rather than relying solely on price appreciation. In the rapidly evolving AI sector, Cuban sees massive potential, believing that AI will be essential for every company’s survival. Comparing AI investments to buying Apple stock in the 1980s, he considers them the future of passive wealth. As he puts it, “Non-dividend stocks are basically baseball cards. But AI? That’s a whole different game.”
Cuban also acknowledges the high-risk, high-reward nature of cryptocurrency investments but warns investors to be cautious. He advises only investing in what one can afford to lose and focusing on cryptocurrencies with real-world applications. His stance is clear: “If you’re not a true adventurer, stay away.” For those seeking a more stable approach, he recommends the broader market, which has historically delivered reliable returns of around 10% annually. Additionally, his involvement with private companies through “Shark Tank” highlights the potential of venture capital, though he recognizes that most investors may need to turn to crowdfunding or venture funds to access similar opportunities.
Our Methodology
The stocks listed below were picked from the public comments that Cuban has made on his investments. He has explicitly mentioned some of his private holdings during these public appearances while only alluding to others. However, based on a careful assessment of the comments, the stocks listed below largely align with his investment philosophy. The list is compiled in descending order of the number of hedge funds having stakes in each firm, which was derived using data from over 1,000 hedge funds tracked by Insider Monkey in the fourth quarter of 2024.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
A gamer playing a game on one of the specialty retail company’s gaming platforms.
GameStop Corp. (NYSE:GME)
Number of Hedge Fund Holders as of Q4: 24
GameStop Corp. (NYSE:GME), a leading global retailer of video games, consumer electronics, and gaming merchandise, is headquartered in Grapevine, Texas. Founded in 1984 as Babbage’s, GameStop is the world’s largest video game retailer with over stores in the United States, Canada, Australia, and across Europe. The company runs its operations under several brand names, including GameStop, EB Games, EB Games Australia, Micromania-Zing, ThinkGeek, and Zing Pop Culture.
In February 2021, Mark Cuban participated in a Reddit forum where he addressed questions about GameStop Corp. (NYSE:GME). He advised users to hold onto their shares despite declining prices, stating that he would have done the same if he were an investor in the company.
On December 10, 2024, GameStop Corp. (NYSE:GME) reported its third-quarter financial results for the period ending November 2, 2024. Revenue declined by 20% to $860 million from $1.08 billion in the same quarter of the previous year. Meanwhile, selling, general, and administrative (SG&A) expenses decreased slightly to $282 million from $296.5 million. Despite the revenue drop, the company posted a net income of $17.4 million, a significant improvement from the $3.1 million net loss in the prior year’s third quarter, marking a 661% increase. The company is set to release its next earnings report on March 25, 2025, with analysts forecasting earnings of $0.09 per share, representing a 59.09% decline from the previous year.
On February 10, GameStop Corp. (NYSE:GME) shares surged, bouncing off their 200-day moving average. The stock gained momentum after CEO Ryan Cohen shared a photo with MicroStrategy CEO Michael Saylor on X, sparking speculation that GameStop might be exploring a move into Bitcoin. MicroStrategy is known as the largest corporate holder of Bitcoin, adding to the intrigue surrounding the post. Over the past two decades, GameStop Corp. (NYSE:GME) has delivered an average annual return of 12.31%, outperforming the market by 4.14% annually.
Diamond Hill Capital stated the following regarding GameStop Corp. (NYSE:GME) in its Q2 2024 investor letter:
“Among our bottom Q2 contributors were our short position in GameStop Corp. (NYSE:GME), as well as our long position in Enovis Corporation. Shares of electronics retailer GameStop got a boost in Q2 as trader Keith Gill again made headlines and reinvigorated retail investors in the stock — which allowed the company to issue new stock and raise more capital.”
Overall, GME ranks 10th on our list of top stock picks from Mark Cuban’s portfolio. While we acknowledge the potential for GME as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than GME but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.