01. Sony Group Corporation (NYSE:SONY)
Number of Hedge Fund Holders: 29
At number one on our list of ten best Japanese stocks to buy now stands Sony Group Corporation (NYSE:SONY). Sony Group Corporation (NYSE:SONY) designs, develops, produces, and sells electronic equipment, instruments, and devices for the consumer, professional, and industrial markets in Japan, the United States, Europe, China, the Asia-Pacific, and internationally. Sony Group Corporation (NYSE:SONY) has demonstrated robust financial performance in its Q1 2024 earnings report, marking it as a strong contender among Japanese stocks. The company reported earnings per share (EPS) of $1.22, exceeding expectations of $1.11, which highlights its strong operational capabilities amidst fluctuating market conditions.
For the quarter, Sony Group Corporation (NYSE:SONY) consolidated sales surged by 12% year-over-year, reaching ¥2.574 trillion, with operating income climbing significantly to ¥249.1 billion. This performance was driven by strong demand across multiple segments, particularly in Gaming and Network Services, where sales rose by 12% due to increased software revenue and a growing PlayStation 5 user base, which now boasts 116 million monthly active users. This level of engagement indicates a robust ecosystem that supports ongoing revenue growth.
Moreover, the company’s upwardly revised full-year forecasts reflect its confidence in sustained growth. Sony Group Corporation (NYSE:SONY) anticipates consolidated sales will increase to ¥12.610 trillion, alongside an expected rise in operating income to ¥1.310 trillion. Notably, the net income forecast has also been revised up to ¥980 billion, emphasizing Sony Group Corporation (NYSE:SONY) strong profitability outlook.
In the Music segment, Q1 sales increased by 23% year-on-year, driven by higher streaming revenues and box office success. The global music market is poised for continued growth, and Sony’s strategic investments in emerging markets, like India and Latin America, position it well to capitalize on these trends.
Despite challenges in the Pictures segment due to decreased theatrical releases, the potential resurgence in box office revenues from new film releases indicates a recovery path. The recent acquisition of Alamo Drafthouse Cinema expands Sony’s footprint in the experiential entertainment sector, which should drive synergies across its content portfolio.
Furthermore, Sony Group Corporation (NYSE:SONY) proactive approach to inventory management and cost control, particularly in the Electronics segment, enhances its resilience against market volatility. With a strong balance sheet and strategic investments across diverse segments, Sony Group Corporation (NYSE:SONY) is well-equipped for future growth, making it a compelling stock choice for investors looking to capitalize on the potential of Japanese equities.
While we acknowledge the potential of SONY to grow, our conviction lies in the belief that some 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 NVDA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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