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NetEase (NTES): Attractive Investment Opportunity with R&D Focus

We recently published a list of 6 Best Video Game Stocks To Invest In. In this article, we are going to take a look at where NetEase (NASDAQ:NTES) stands against the other best video game stocks to invest in.

Video Gaming Market 

According to a report by Precedence Research, the global video games market was valued at $248.52 billion in 2023 and is expected to grow to $664.96 billion by 2033, at a CAGR of 10.32%. The market is driven by the increasing adoption of Augmented Reality (AR) and Virtual Reality (VR) technologies, which provide immersive gaming experiences.

The Asia Pacific region held a revenue share of 54.14% in 2023, driven by the region’s large population, rising disposable incomes, and increasing urbanization. North America held a share of 22.43% in 2023, driven by the presence of leading console manufacturers such as Microsoft and Sony. The region is home to some of the world’s largest and most influential gaming companies, contributing to the industry’s growth.

The market is driven by the increasing adoption of cloud gaming, the introduction of VR and AR technologies, and the growing popularity of online gaming. However, the growing complexity of game development, the increasing costs, and the need for specialized skills and expertise required to develop immersive experiences are restraining the market’s growth.

Gaming Industry Struggles to Secure Investment

According to Spike Laurie, Partner at VC Hiro Capital, the gaming industry is facing a funding crisis, with investors becoming increasingly cautious about backing new projects. The bar is extremely high right now, and merely having a great game idea and a talented team is no longer sufficient to secure investment. Laurie explains that the current economic situation is tough, with interest rates rising and people’s disposable income taking a hit.

Eliana Oikawa, CEO of Wings, an investment company that finances independent game developers, agrees that the fundraising market is tight, and investors are worried about the risk of not being able to raise further rounds. Many funds are sitting on the sidelines, and the collective caution has become self-fulfilling. We’re being very selective about what we’re backing, and we’re looking for companies that have a unique value proposition and a clear path to profitability.

Patrick O’Donnell, Video Gaming Analyst at Goodbody Equity Research, notes that the current situation in the game industry is very challenging. O’Donnell explains that there is a lot of competition, and it’s harder for new games to break through. We’re looking for companies that have a clear entrepreneurial approach and the ability to validate from users or the market early and often. The industry needs to focus on business essentials and make more money than it needs to spend.

The global video games market is poised for significant growth, driven by the increasing adoption of AR and VR technologies, cloud gaming, and online gaming. However, the gaming industry is facing a funding crisis, with investors becoming increasingly cautious about backing new projects.

Our Methodology

For this article, we sifted through ETFs and online rankings to compile an initial list of 15 video game stocks. From that list, we shortlisted the stocks that were the most widely held by hedge funds, as of Q2 2024. The hedge fund sentiment was sourced from our database of 912 elite hedge funds.

Why do we care about what hedge funds do? 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 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).

Two gamers enjoying an immersive experience playing together online via their gaming console.

NetEase (NASDAQ:NTES)  

Number of Hedge Fund Investors: 35

NetEase (NASDAQ:NTES) is a leading Chinese technology company specializing in online services, with its core business in gaming, education, and e-commerce. The company’s gaming division develops and publishes popular mobile and PC games, both domestically and globally. NetEase (NASDAQ:NTES) has published more than 100 game products and is known for partnerships with major gaming companies such as Blizzard Entertainment.

NetEase (NASDAQ:NTES) has a strong pipeline of new game releases and recently launched new games, including Naraka: Bladepoint Mobile, in China in July, which received positive reviews. Additionally, the company’s Hero Shooter and Marvel Rival have also received positive feedback from players. The company has also launched Marvel Rivals on PlayStation 5 and Xbox Series X|S in addition to PC.

NetEase’s (NASDAQ:NTES) financial position is outstanding, with almost $19 billion in cash and equivalents against almost no debt. This financial strength allows the company to invest in R&D efforts and experiment with new game releases. The company’s financial strength and strong pipeline of new game releases make it an attractive investment opportunity. Industry analysts have a consensus for the stock’s Buy rating, with a median price target of $115.34, which suggests a potential upside of almost 20% from current levels.

As of the second quarter, 35 hedge funds own stakes in the company valued at $993.75 million. According to Insider Monkey’s hedge funds database, Orbis Investment Management is the largest shareholder, with stakes worth $182.28 million.

Overall NTES ranks 4th on our list of best video game stocks to invest in. While we acknowledge the potential of NTES as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than NTES but that trades at less than 5 times its earnings check out our report about the cheapest AI stock.

READ NEXT: $30 Trillion Opportunity: 15 Best Humanoid Robot Stocks to Buy According to Morgan Stanley and Jim Cramer Says NVIDIA ‘Has Become A Wasteland’.

Disclosure: None. This article 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.
  • It’s one of the only global companies capable of executing large-scale, complex EPC (engineering, procurement, and construction) projects across oil, gas, renewable fuels, and industrial infrastructure.
  • It plays a pivotal role in U.S. LNG exportation—a sector about to explode under President Trump’s renewed “America First” energy doctrine.

Trump has made it clear: Europe and U.S. allies must buy American LNG.

And our company sits in the toll booth—collecting fees on every drop exported.

But that’s not all…

As Trump’s proposed tariffs push American manufacturers to bring their operations back home, this company will be first in line to rebuild, retrofit, and reengineer those facilities.

AI. Energy. Tariffs. Onshoring. This One Company Ties It All Together.

While the world is distracted by flashy AI tickers, a few smart investors are quietly scooping up shares of the one company powering it all from behind the scenes.

AI needs energy. Energy needs infrastructure.

And infrastructure needs a builder with experience, scale, and execution.

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.

While most energy and utility firms are buried under mountains of debt and coughing up hefty interest payments just to appease bondholders…

This company is completely debt-free.

In fact, it’s sitting on a war chest of cash—equal to nearly one-third of its entire market cap.

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.

They’re sharing it quietly, away from the cameras, to rooms full of ultra-wealthy clients.

Why? Because excluding cash and investments, this company is trading at less than 7 times earnings.

And that’s for a business tied to:

  • The AI infrastructure supercycle
  • The onshoring boom driven by Trump-era tariffs
  • A surge in U.S. LNG exports
  • And a unique footprint in nuclear energy—the future of clean, reliable power

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

This isn’t a hype stock. It’s not riding on hope.

It’s delivering real cash flows, owns critical infrastructure, and holds stakes in other major growth stories.

This is your chance to get in before the rockets take off!

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

AI is the ultimate disruptor, and it’s shaking the foundations of traditional industries.

The companies that embrace AI will thrive, while the dinosaurs clinging to outdated methods will be left in the dust.

As an investor, you want to be on the side of the winners, and AI is the winning ticket.

The Talent Pool is Overflowing: The world’s brightest minds are flocking to AI.

From computer scientists to mathematicians, the next generation of innovators is pouring its energy into this field.

This influx of talent guarantees a constant stream of groundbreaking ideas and rapid advancements.

By investing in AI, you’re essentially backing the future.

The future is powered by artificial intelligence, and the time to invest is NOW.

Don’t be a spectator in this technological revolution.

Dive into the AI gold rush and watch your portfolio soar alongside the brightest minds of our generation.

This isn’t just about making money – it’s about being part of the future.

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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…