In this article, we will look at 4 best video game stocks to invest in now. If you want to see our detailed analysis of the video game industry, you can go to 11 Best Video Game Stocks To Invest in Now.
4. NVIDIA Corporation (NASDAQ:NVDA)
Number of Hedge Fund Holders: 110
NVIDIA Corporation (NASDAQ:NVDA) is renowned for world-class graphics processing units (GPUs), which are an essential part of gaming consoles and gaming computers. The company’s GeForce RTX series is on every PC gamer’s wishlist as they deliver outstanding frame rates which boost consumer experience. The company also operates a cloud-based gaming platform, the Nvidia GeForce Now, which allows users to play games hosted on remote services and streamed over the internet to supported devices.
Hedge funds are upping their stakes in the semiconductor giant. At the end of the fourth quarter of 2021, 110 hedge funds held long positions in NVIDIA Corporation (NASDAQ:NVDA) worth roughly $10.49 billion. This is compared to 83 hedge funds in the previous quarter with stakes worth $10.05 billion. The hedge fund sentiment for the stock is positive. On top of this, on April 13, New Street analyst Pierre Ferragu upgraded NVIDIA Corporation (NASDAQ:NVDA) to Buy from Neutral with a $280 price target.
As of December 31, 2021, Fisher Asset Management is the leading shareholder in NVIDIA Corporation (NASDAQ:NVDA) having stakes worth $1.5 billion which covers 0.84% of the fund’s Q4 2021 investment portfolio.
ClearBridge Investments explained why NVIDIA Corporation (NASDAQ:NVDA) is a worthy investment choice in its first-quarter 2021 investor letter. Here is what they said:
“Gaming is an attractive end market within the media/technology sector with strong growth and a long runway, particularly in mobile gaming. Unity’s platform provides an engine and toolkit for development and monetization of games, e-commerce and industrial applications, adding to our industry exposure, which also includes Nvidia (NASDAQ:NVDA) in graphic processing chips.”
3. Alphabet Inc. (NASDAQ:GOOG)
Number of Hedge Fund Holders: 158
Among the top 3 video game stocks to invest in now, we have Alphabet Inc. (NASDAQ:GOOG), the company that pioneered cloud-based gaming when it launched the Google Stadia back in late 2019. Alphabet Inc. (NASDAQ:GOOG) removed the need to own a gaming console with Google Stadia, which allows users to play video games on screens they own over the internet, without having to install, download, or update them.
This April, Rosenblatt analyst Barton Crockett initiated coverage of Alphabet Inc. (NASDAQ:GOOG) with a Buy rating and a $4,183 price target. The analyst sees the company as well-positioned to benefit from its dominance in the cloud services market.
Alphabet Inc. (NASDAQ:GOOG) is a top stock pick among elite hedge funds. At the end of the fourth quarter of 2021, 158 hedge funds were long Alphabet Inc. (NASDAQ:GOOG) with collective stakes worth $36.62 billion. This is compared to 156 positions in the third quarter of 2021 with stakes worth $34.95 billion.
Chris Hohn’s TCI Fund Management owned more than 2.9 million shares of Alphabet Inc. (NASDAQ:GOOG) at the end of last December, making it the largest stakeholder in the company. This amounts to a stake value of $8.5 billion which covers 19.22% of the fund’s Q4 2021 investment portfolio.
Here is what Ensemble Capital had to say about Alphabet Inc. (NASDAQ:GOOG) in its first-quarter 2022 investor letter:
“Google (6.6% weight in the Fund): Google is one of the most extraordinary businesses of the digital age. Its mission is “to organize the world’s information and make it universally accessible and useful.” This is such a broad organizing principle for a company whose value is built on doing just that. When you think about the mass adoption of the Internet, smartphones, social and digital media, and e-commerce among billions of users every day, and the exponential growth of data that has brought, we all know how valuable Google’s role in collecting, organizing, and filtering all that information has become in our daily lives.
NVidia’s CEO Jensen Huang put the challenge really well in an interview with Tech Analyst Ben Thompson recently:
“We know that there are a trillion things on the Internet and the number things on the Internet is large and expanding incredibly fast, and yet we have this little, tiny personal computer called a phone… how do we possibly figure out of the trillion things in the internet what we want to see on our little tiny phone?
Well, there needs to be a filter in between… basically an AI, a recommender system. A recommender that figures out based on the nature of the content, the characteristics of the content, the features of the content, based on your implicit and your explicit [preferences], find a way through all of that to predict what you would like to see.
I mean, that’s a miracle! That’s really quite a miracle to be able to do that at scale for everything from movies and books and music and news and videos and you name it.”
While Huang was talking about the role of artificial intelligence more generally amidst the data explosion, it’s hard not to think of Google as most fitting the role of the Internet’s leading “recommender system,” with its de facto role as the gateway to the Internet. In fact, it’s no coincidence that Google is a leader in AI technology, which it applies across most all of its services…” (Click here to see the full text)
2. Microsoft Corporation (NASDAQ:MSFT)
Number of Hedge Fund Holders: 262
Microsoft Corporation (NASDAQ:MSFT) launched the first Microsoft Xbox on November 19, 2001. Today we have the Xbox Series X, launched in 2020, which as of now runs over the most powerful hardware and allows compatibility for next-gen games. The Sony PlayStation 5 and the Microsoft Xbox Series X were the most-bought gaming consoles in 2021, and for the first time since their unveiling, the Microsoft Xbox Series X outsold the Sony PS5 in the first quarter of 2022.
This April, Citi analyst Tyler Radke raised his price target on Microsoft Corporation (NASDAQ:MSFT) to $364 from $355 and maintained a Buy rating on the shares, in light of the company’s strong third-quarter earnings for 2022.
As of December 31, 2021, Fisher Asset Management owns more than 26.8 million shares of Microsoft Corporation (NASDAQ:MSFT) which amounts to a stake value of $9.02 billion. The investment covers 5.05% of Ken Fisher’s hedge fund portfolio.
Motiwala Capital mentioned Microsoft Corporation (NASDAQ:MSFT) in its fourth-quarter 2021 investor letter, here is what the firm said:
“Microsoft (NASDAQ:MSFT) re-enters our portfolio after a long gap. MSFT sells enterprise and consumer software products as well as hardware products such as the Xbox video game console and Surface laptops. All business segments experienced double-digit revenue growth and earnings per share have compounded in the mid-double digits over the last 5 years. We believe MSFT continues this momentum in the years ahead.”
1. Amazon.com, Inc. (NASDAQ:AMZN)
Number of Hedge Fund Holders: 279
Amazon.com, Inc. (NASDAQ:AMZN) might not ring bells when the gaming industry is being discussed, however, the company is among the best gaming stocks to invest in now. Amazon.com, Inc. (NASDAQ:AMZN) not only offers a leading platform for the sale and purchase of gaming products, but also owns and operates Amazon Game Studios, the company’s gaming subsidiary which is currently partnered up with video game giants such as Electronic Arts Inc. (NASDAQ:EA), Sony Group Corporation (NYSE:SONY), Epic Games, Rockstar Games, and Riot Games, among others. On April 28, 2022, Amazon.com, Inc. (NASDAQ:AMZN) reported earnings for the fiscal first quarter of 2022 in which it generated revenues of $116.44 billion, up 7.30% year over year.
Amazon.com, Inc. (NASDAQ:AMZN) is a top stock pick among elite hedge funds. At the end of the fourth quarter of 2021, 279 hedge funds were long Amazon.com, Inc. (NASDAQ:AMZN) with combined stakes of $49.16 billion. This is compared to 242 hedge funds in the previous quarter with stakes worth $42.55 billion.
Fisher Asset Management is the leading shareholder in Amazon.com, Inc. (NASDAQ:AMZN) as of the end of Q4 2021. The fund’s stakes in the e-commerce giant were valued at $7.22 billion which covers 4.04% of its 13F portfolio.
Here is what Oakmark Funds had to say about Amazon.com, Inc. (NASDAQ:AMZN) in its first-quarter 2022 investor letter:
“Amazon is the leading e-commerce and cloud-computing provider in the world. In e-commerce, two-thirds of U.S. households are Amazon Prime subscribers, and over half of all online product searches now start on Amazon. We believe the company’s strong customer loyalty and massive infrastructure are significant barriers to entry in a growing e-commerce market. Separately, Amazon Web Services (AWS) controls nearly half of the market in cloud computing. We believe AWS has become utility-like in nature and scale, and we expect healthy growth moving forward as IT workloads continue moving to the cloud. More recently, concerns about rising investment spending have weighed on the stock-as they have in times past-providing us another opportunity to purchase shares at an attractive multiple of normalized earnings and a discount to its peer-weighted enterprise value-to-sales multiple.”
You can also take a look at 15 Most Valuable Gaming Companies in the World and 10 Best Metaverse ETFs To Buy.
