Source: Gorodenkov / Shutterstock.com
Video games have taken the lead in the entertainment sector and are captivating younger generations, which makes finding top gaming stocks especially appealing for investors.
The impact on gaming stocks is immense, with the number of gamers worldwide at approximately 3.09 billion and projected to swell to 3.32 billion by 2024. This booming player base is fueling a booming global gaming market, which is expected to grow at a compound annual growth rate of 13.6% from 2023 to 2030, reaching a staggering $682 billion by 2030.
Additionally, the U.S. gaming industry is booming due to the expansion of mobile gaming and new console technology. The rollout of nationwide 5G networks is expected to accelerate this trend, overcoming traditional mobile gaming limitations caused by low bandwidth and latency. That said, three gaming stocks stand out in a competitive market, capturing investor interest and spearheading the industry’s future.
Microsoft (MSFT)
Source: The Art of Pics / Shutterstock.com
Microsoft (NASDAQ:MSFT) has recently made some big strides in the gaming industry and is looking to expand its influence. The strategic acquisition of Activision Blizzard (NASDAQ:ATVI) has propelled MSFT to the third largest gaming company in the world and significantly expanded its empire. The move strengthens Microsoft’s presence in mobile, PC, console and cloud gaming, while also laying the groundwork for a new metaverse initiative.
Additionally, the excitement surrounding Microsoft’s revolutionary disc-less Xbox console and the announcement by Microsoft and its partners of cutting-edge Windows 11 gaming PCs demonstrate the company’s ambitions to usher in a new era of gaming technology.
On the financial side, MSFT saw its stock price rise an astounding 56.53% over the past year, while its revenue rose 17.7% year over year to $62.02 billion. Earnings per share (EPS) also reached $2.93, beating expectations by 16 cents. TipRanks analysts expressed further optimism, giving MSFT a “Strong Buy” rating with room for upside of 14.7%.
Electronic Arts (EA)
Image source: g0d4ather / Shutterstock.com
Gaming industry pioneer Electronic Arts (NASDAQ:EA) continues to dominate with iconic sports titles such as FIFA and Madden, resulting in commendable performance with its stock price increasing 20% over the past year. EA continues to strengthen its global influence by engaging with the esports community through events such as EA Sports WRC Knockout Trophy ’23 and the Apex Legends Global Series.
The launch of EA SPORTS FC 24, the latest installment of the wildly popular soccer video game, continues to highlight EA’s strength in the sports gaming sector, with over 14.5 million active accounts in the first month alone. On the financial side, EA shines as EPS hit $1.07, beating expectations by 17 cents and revenue increasing 1.02% year over year. These impressive financials, backed by a “Moderate Buy” rating from TipRanks analysts and a forecast upside potential of 11.78%, highlight EA’s future potential.
Nintendo (NTDOY)
Picture from Nintendo
Nintendo (OTCMKTS:NTDOY) has consistently captured the hearts of gamers, with its stock price soaring 49.8% over the past year. This rally has fueled speculation about Nintendo’s next-generation system, likely to be named Switch 2. Targeted for a launch in the second half of 2024, the new and improved console is expected to revolutionize the gaming world once again.
Additionally, Nintendo’s strategic partnerships and diverse game lineup will further strengthen the Switch platform. Partnering with Microsoft to bring Xbox exclusive games such as “Grounded” and “Pentiment” to Switch demonstrates Nintendo’s innovative approach. Furthermore, the recent Nintendo Direct: Partner Showcase highlighted the return of popular games from the past, which are expected to become major revenue streams.
Financially, Nintendo reported a staggering $4.05 billion in revenue, beating expectations by $161.04 million. The company’s forecast to sell 15.5 million Switch units by the end of March is a testament to the company’s robust market presence. Wall Street analysts have rated Nintendo a “Strong Buy” with a projected stock upside of 129.46%, making it an attractive choice for investors.
As of the date of publication, Muslim Farooq did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the author in accordance with InvestorPlace.com’s Publication Guidelines.
Muslim Farooq is an avid investor and optimist at heart. A lifelong gamer and technology enthusiast, he has a particular interest in analyzing technology stocks. Muslim holds a Bachelor of Science in Applied Accounting from Oxford Brookes University.