1. Sony Group Corporation (NYSE:SONY)
Number of Hedge Fund Holders: 21
Sony Group Corporation (NYSE:SONY) is a Japanese global company with a wide portfolio that includes electronics, gaming, entertainment, and financial services. The firm uses technical innovation, as well as the appeal of its intellectual assets, to drive growth in its main segments.
On January 29, Citi analyst Kota Ezawa confirmed his neutral rating on Sony Group Corporation (NYSE:SONY), keeping a price target of JPY2,800. The statement comes following Sony’s announcement of a shift in its management structure, which will take effect on April 1. Sony revealed its new management team, with Hiroki Totoki, the current president, COO, and CFO, taking on the role of CEO. This is seen as a potentially pivotal move, with the new CEO expected to drive additional development in electric cars.
For the first quarter of fiscal year 2025, Sony Group Corporation (NYSE:SONY) reported a 2% increase in revenues and a 6% increase in net profit. Sony’s adjusted EBITDA increased by 42% year-over-year despite a 22% drop in PlayStation 5 sales, thanks to higher-than-expected sales of third-party titles.
According to Insider Monkey’s data, 21 hedge funds held stakes in Sony Group Corporation (NYSE:SONY) as of the end of Q3 2024.
Aristotle International Equity Strategy stated the following regarding Sony Group Corporation (NYSE:SONY) in its Q4 2024 investor letter:
“Sony Group Corporation (NYSE:SONY), the global provider of videogames and consoles, image sensors, music, and movies, was a top contributor for the period. The company reported strong results driven by third-party gaming revenue and record PlayStation 5 console profitability. This was achieved despite lower console sales, which, in our view, exemplifies the strength of PlayStation’s network effects. PlayStation is the world’s largest gaming platform with 116 million monthly active users, making it an attractive market for game developers and allowing users to play the most advanced games at lower costs than PCs. In its Pictures segment, Crunchyroll (the anime business Sony acquired from AT&T in 2020) signed a distribution agreement with YouTube Primetime Channels, the market share leader in streaming services, which we believe will increase Crunchyroll’s subscriber base. Though a singular example, it illustrates management’s ability to better execute and further improve the segment’s profitability, a catalyst we previously identified. In addition, Sony reported improved sales of image sensors for mobile products as the global smartphone market continued its gradual recovery. Sony’s image sensor business has the largest global market share, and we believe, longer term, it is uniquely positioned to benefit from increasing demand for both autonomous driving technology in vehicles and improved image quality in smartphone cameras. As such, we continue to admire Sony’s capacity to build on its industry leadership and optimize its operations, which includes its plan for a partial spinoff of its Financial Services segment in October 2025.”
While we acknowledge the potential of SONY, our conviction lies in the belief that certain 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 SONY but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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