11 Best Esports Stocks to Buy Now

In this article, we discuss the 11 best esports stocks to buy now.

Esports is growing at a fast pace and is one of the industries that has made millionaires out of young people. For example, Illya Mulyarchuk, nicknamed Yatoro, is a 20-year-old DOTA 2 (multiplayer online battle arena video game) player who managed to grab nearly $3.7 million at the age of 18 from a single event in 2021. The massive prize pools are a testament to the rapid development of this young industry. 

In 2023, Singapore became the first country to host Olympic Esports Week. In an interview with CNBC in June 2023, Singapore’s minister of state for culture, community, and youth, Alvin Tan, said that they are optimistic about the growth opportunities in the industry. The minister added that the event is a “pathfinder” in terms of revenue generation and revealed that the esports audience has reached over half a billion people. He further commented that South East Asia is the fastest-growing esports region. According to a market analysis report by Research and Markets, the global esports market was valued at around $2.56 billion in 2022. The market is expected to grow at a compound annual growth rate of 21.9% between 2023 and 2030 and reach $12.5 billion by the end of the forecasted period.

The expansion of the industry is sustained by a significant increase in broadcasting rights, technological innovations, and an increase in the global gaming audience. Nevertheless, the industry is still new and is in its adjustment period. Since 2022, there has been a decline in investments and sponsorship deals in the industry. On January 23, Reuters cited Newzoo’s report and said that the global gaming market declined by 4.3% in 2022. Nevertheless, it grew 0.6% in 2023 and is expected to grow by 2.8% to $189.3 billion in 2024.

The industry experienced the most significant growth during the COVID-19 pandemic. VanEck Video Gaming and eSports ETF (ESPO) gained over 100% between February 2020 and 2021. While the esports industry has been facing some challenges since 2022, the companies are still performing well as the ETF has gained over 14% year-to-date, as of March 8, compared to the S&P 500’s 8% gain. 

Prominent Names in the Industry

As mentioned, the esports industry is quite young. However, it has managed to grab the attention of some big names in the US market. Amazon.com, Inc. (NASDAQ:AMZN) and Alphabet Inc. (NASDAQ:GOOG) are some companies that are deeply involved in the industry as their subsidiaries, Twitch and YouTube (respectively), hold the broadcasting rights for some of the biggest esports events in the world. In addition, Intel Corporation (NASDAQ:INTC) has served as a sponsor and hardware supplier for esports events, and NVIDIA Corporation (NASDAQ:NVDA) has made significant contributions with its cutting-edge graphics processing technology.

Tencent Holdings Limited (OTCMKTS:TCEHY) is another big name in the industry. Its US-based subsidiary, Riot Games, produced League of Legends (LoL), which was the most-viewed esports game in the world in 2023, according to Esports Insider. According to John Needham, Riot’s president of esports, their major LoL events, such as the Mid-Season Invitational (MSI) and Worlds, saw significant growth in Average Minute Audience (AMA) in 2023. MSI saw an AMA increase of 58% year-over-year (YoY), while Worlds’ AMA was up by 65%. The parent company, Tencent Holdings Limited, is also working on expanding its video gaming business further. On March 14, Reuters reported that the company acquired two new video game units from TikTok’s parent company, ByteDance.

Microsoft Corporation (NASDAQ:MSFT) already covered 60% to 70% of the cloud gaming market and is now one of the biggest names in the video gaming and esports industry after the acquisition of Activision Blizzard (former ticker: ATVI). Here is what the Executive Vice President and CFO of the company, Amy Hood, said about the acquisition in its latest earnings call:

“At a company level, Activision contributed approximately 4 points to revenue growth, was a 2 point drag on adjusted operating income growth, and a negative $0.5 impact to earnings per share. This impact includes $1.1 billion from purchase accounting adjustments, integration and transaction-related costs, such as severance-related charges related to last week’s announcement.”

Hood further added:

“Company gross margin dollars increased 20% and 18% in constant-currency and gross margin percentage increased year-over-year to 68%. Excluding the impact of the change in accounting estimate, gross margin percentage increased roughly 2 points, even with the impact of $581 million from purchase accounting adjustments, integration, and transaction-related costs from the Activision acquisition. Growth was driven by improvement in devices, as well as the improvement in Azure and Office 365 as just mentioned.

Operating expenses increased 3% with 11 points from the Activision acquisition, partially offset by 7 points of favorable impact from the prior year Q2 charge. The Activision impact includes $550 million from purchase accounting adjustments, integration, and transaction-related cost.”

On March 1, TheFly reported that Microsoft Corporation is partnering with GPU hardware vendors, including NVIDIA Corporation, Advanced Micro Devices, Inc. (NASDAQ:AMD), and Intel Corporation, for a new API called DirectSR. The API would be used for the integration of Super Resolution into the next generation of PC video games.

Keeping all of the information mentioned above in mind, some of the best esports stocks to buy now include Microsoft Corporation (NASDAQ:MSFT), NVIDIA Corporation (NASDAQ:NVDA), and Advanced Micro Devices, Inc. (NASDAQ:AMD). You can also check out Top 55 Video Games Of All Time: 2024 Rankings and 15 Best Video Games Coming Out in 2024.

11 Best Esports Stocks to Buy Now

Our Methodology

For this article, we identified the stocks from video games-related ETFs such as VanEck Video Gaming and eSports ETF (ESPO), Global X Video Games & Esports ETF (HERO), First Trust S-Network Streaming & Gaming ETF (BNGE), and BetaShares Video Games and Esports ETF (GAME), in addition to Yahoo Finance stock screener and multiple internet rankings of esports stocks. Next, we checked each company’s operations related to e-sports. We compiled an initial list of 20 possible candidates and then narrowed down our selection to the 11 most widely held by institutional investors. Below is the list of the best esports stocks to buy now according to hedge funds, ranked in ascending order of the number of hedge funds that have stakes in them as of Q4 2023.

The hedge fund data was taken from Insider Monkey’s database of 933 elite hedge funds. Hedge funds’ top 10 consensus stock picks outperformed the S&P 500 Index by more than 140 percentage points over the last 10 years (see the details here). That’s why we pay very close attention to this often-ignored indicator.

11 Best Esports Stocks to Buy Now

11. Inspired Entertainment, Inc. (NASDAQ:INSE)

Number of Hedge Fund Holders: 21

Inspired Entertainment, Inc. (NASDAQ:INSE) is a gaming tech company that provides its products and services through various segments, including Gaming, Virtual Sports, Interactive, and Leisure.

Inspired Entertainment, Inc. was part of 21 hedge funds’ portfolios in the fourth quarter of 2023 with a total stake value of $94.165 million. Andrew N. Wiener’s Samjo Capital is the biggest shareholder in the stock and has a position worth $22.354 million as of Q4 2023.

On February 7, Inspired Entertainment, Inc. announced that it expanded its partnership network by entering into an agreement with Kambi Group for the integration of Inspired Virtual Sports products into the latter’s sportsbook platform.

On January 11, Truist lowered the price target on Inspired Entertainment, Inc.’s (NASDAQ:INSE) stock to $13 from $19 and maintained a Buy rating on the shares.

Inspired Entertainment, Inc. is one of the best esports stocks to buy now, along with Microsoft Corporation, NVIDIA Corporation, and Advanced Micro Devices, Inc..

10. Sony Group Corporation (NYSE:SONY)

Number of Hedge Fund Holders: 21

Sony Group Corporation (NYSE:SONY) is a Japanese conglomerate company that is a notable name in the esports industry. The company hosts its PlayStation tournaments, owns the Evolution Championship Series (Evo) fighting game tournament, and more.

On February 14, Sony Group Corporation reported its Q3 GAAP EPS of ¥294.82 (¥1 = US$0.0068 as of March 8) and revenue of ¥3747.5 billion, which increased 21.7% YoY.

According to Insider Monkey’s database that tracks 933 elite hedge funds, the number of hedge funds in Q4 was the same as that of Q3’s in Sony Group Corporation, i.e. 21, but the total stake value increased to $952.952 million in the fourth quarter, compared to $784.527 million in Q3. Ken Fisher’s Fisher Asset Management has increased its stake by 6% and owns 6.36 million company shares worth nearly $602.150 million, as of the fourth quarter.

Over the past three months, Sony Group Corporation has received Buy ratings from 2 Wall Street analysts. The average price target of $107.50 has an upside of 33.89% as of March 8.

9. Genius Sports Limited (NYSE:GENI)

Number of Hedge Fund Holders: 31

Genius Sports Limited (NYSE:GENI) is a UK-based company that offers data management, video streaming, and integrity services to its clients, including sports leagues, bookmakers, and media companies. Genius Sports Limited is the 8th best esports stock to buy now.

In the past three months, Genius Sports Limited has received Buy ratings from 8 Wall Street analysts. As of March 8, the average price target of $8.92 has an upside of 49.66% from current levels.

31 hedge funds had investments in Genius Sports Limited’s stock worth $207.640 million in Q4. Catherine D. Wood’s ARK Investment Management has increased its stake in the company by 10% to 6.9 million shares worth $42.73 million and is the most significant shareholder, as of the fourth quarter.

8. NetEase, Inc. (NASDAQ:NTES)

Number of Hedge Fund Holders: 36

NetEase, Inc. (NASDAQ:NTES) is a Chinese tech company that offers and develops video games of various genres under its online games division, NetEase Games.

On February 29, NetEase, Inc. released its FY2023 earnings result with net revenues of RMB 103.5 billion (RMB 1= 0.14 USD as of March 8), compared to RMB 96.5 billion in the previous year. In the fiscal year 2023, the net income attributable to shareholders was RMB29.4 billion, compared to RMB20.3 billion in the prior year.

In the fourth quarter, hedge fund sentiment was positive toward NetEase, Inc.’s stock, as 36 hedge funds held investments worth $1.341 billion. This is compared to 25 funds in the third quarter, with positions worth $1.035 billion. Larry Chen And Terry Zhang’s Tairen Capital is the largest shareholder in the company, with 1.76 million company shares worth $164.307 million, as of Q4 2023.

7. Electronic Arts Inc. (NASDAQ:EA)

Number of Hedge Fund Holders: 42

Electronic Arts Inc. (NASDAQ:EA) is a California-based company that is involved in competitive sports video games through its division, EA Sports. 

The company takes the 7th spot on our list of best esports stocks. In Q4, 42 hedge funds held positions in the stock, and their total stakes amounted to $1 billion. As of the fourth quarter of 2023, D E Shaw is the top shareholder in the company. The firm has increased its stake in the company by 177% to 1.124 million shares worth $153.82 million.

On January 31, Electronic Arts Inc. declared a quarterly dividend of $0.19, payable by March 20 to the shareholders of record on February 28. As of March 8, the stock’s dividend yield is 0.56%.

On January 30, Electronic Arts Inc. released its Q3 GAAP EPS of $1.07, which surpassed the estimates by $0.19. The bookings in the quarter jumped 1.3% YoY to $2.37 billion.

6. Roblox Corporation (NYSE:RBLX)

Number of Hedge Fund Holders: 50

Roblox Corporation (NYSE:RBLX) is a California-based gaming platform that offers its users various types of gaming experiences, including virtual, racing, and other games.

On February 7, Roblox Corporation reported its Q4 GAAP EPS of -$0.52, which beat the analysts’ estimates by $0.03. The bookings of $1.13 billion climbed 25.6% year-over-year (YoY) and topped the estimates by $50 million.

According to Insider Monkey’s database that tracks 933 elite hedge funds, hedge fund sentiment was positive toward Roblox Corporation in Q4 2023. The stock was part of 50 funds’ portfolios, and the total stake value was $2.94 billion in the fourth quarter, compared to 34 funds in the previous quarter with a total stake of $1.3 billion. With 11.9 million shares worth $544.350 million, Catherine D. Wood’s ARK Investment Management is the most prominent shareholder in the company, as of December 31, 2023.

Roblox Corporation was covered by 20 Wall Street analysts over the last three months, and 13 kept a Buy rating on the stock. The average price target of $49.79 represents an upside of 24.66% from current levels, as of March 8.

Microsoft Corporation, NVIDIA Corporation, and Advanced Micro Devices, Inc. are some of the best esports stocks to buy now, in addition to Roblox Corporation.

5. Sea Limited (NYSE:SE)

Number of Hedge Fund Holders: 51

Sea Limited (NYSE:SE) is a Singapore-based tech company that provides its services through its different segments, including online gaming, e-commerce, and digital financial services. The company is involved in the esports industry through its gaming division Garena, a leading organizer of esports events and best known as the developer of Free Fire.

On February 5, Daiwa upgraded the rating on Sea Limited’s stock to Buy from Hold and increased the price target to $50 from $48.50.

In the fourth quarter, 51 hedge funds had stakes in Sea Limited’s stock, and the total stakes of the funds amounted to $2.173 billion. The most significant investor, Chase Coleman And Feroz Dewan’s Tiger Global Management LLC increased its stake in the stock by 23% to 14.32 million shares worth almost $580 million, in the fourth quarter of 2023.

Lakehouse Capital made the following comment about Sea Limited in its September 2023 investor letter:

“The biggest contributor to performance during the month was Sea Limited (+17.2%), which performed well on the back of news that the Indonesian government will ban direct transactions on social media platforms. Indonesia is Sea’s largest market, and the new regulation is expected to significantly hinder their fastest growing competitor, TikTok Shop, and benefit the incumbent e-commerce platforms like Tokopedia and Sea’s Shopee.”

4. Take-Two Interactive Software, Inc. (NASDAQ:TTWO)

Number of Hedge Fund Holders: 59

Take-Two Interactive Software, Inc. (NASDAQ:TTWO) is a video game holding company that owns and operates two big publishing labels, Rockstar Games and 2K.

Take-Two Interactive Software, Inc.’s subsidiary Rockstar Games is said to launch GTA VI between January and March 2025, and the game is anticipated to greatly boost the company’s revenue. When the company released the game’s trailer in December 2023, Jefferies analyst Andrew Uerkwitz mentioned that the release date could deliver the company’s “guidance of about $8 billion in bookings in financial year 2025 and growth in 2026”. It is essential to note that the company cut down its projection for net bookings for fiscal 2025 to over $7 billion.

On February 8, Take-Two Interactive Software, Inc. posted Q3 non-GAAP EPS of -$0.54 and revenue of $1.37 billion, which beat the analysts’ estimates by $30 million.

In the last three months, 21 Wall Street analysts have covered Take-Two Interactive Software, Inc., and 18 maintain a Buy-equivalent rating on the stock. The average price target of $179.43 represents an upside of 24.84% as of March 8. In the fourth quarter, 59 hedge funds held positions in the stock worth $2.858 billion, compared to 51 funds’ positions in the preceding quarter worth $2.448 billion. As of Q4 2023, Tiger Global Management LLC is the top shareholder in the stock and has a position worth $829.886 million.

3. Advanced Micro Devices, Inc. (NASDAQ:AMD)

Number of Hedge Fund Holders: 120

Advanced Micro Devices, Inc. is a California-based chipmaker, and its products are widely used in e-gaming. The company is a sponsor of the professional esports organization called Fnatic. Moreover, its Ryzen processor series and Radeon graphics card series are popular among esports players. Advanced Micro Devices, Inc. is one of the top hardware suppliers for the esports industry.

In the fourth quarter, hedge fund sentiment was positive toward Advanced Micro Devices, Inc., which is why it is the 3rd best esports stock to buy now. In the quarter, 120 hedge funds held positions in the company and their stakes amounted to $15.165 billion. This is compared to 110 funds in the third quarter, with positions worth $9.156 billion. As of December 31, 2023, Fisher Asset Management is the largest shareholder in the company and has a position worth $4.177 billion.

On February 23, Benchmark analyst Cody Acree reiterated a Buy rating on Advanced Micro Devices, Inc.’s stock and raised the price target from $187 to $245 on the shares.

Jackson Peak Capital stated the following regarding Advanced Micro Devices, Inc. in its fourth quarter 2023 investor letter:

“On the long side of the portfolio, a core theme we remain invested behind is the data center infrastructure buildout and AI chips arms race that we’ve discussed since our first letter in Q2. Some skepticism has crept into the market, and it’s understandable given the huge ramp in 2023. However, our research continues to suggest 2023 was the start of a multi-year platform shift. Value will accrue to varying segments of the AI value chain at different parts of the cycle. We continue to see value in the “boots on the ground” winners in the data center buildout (Vertiv, Modine Manufacturing, Celestica). Our positioning in AI semiconductor companies (NVDA and Advanced Micro Devices, Inc.) has ebbed and flowed given we are cognizant (perhaps too much so) that these names are crowded positions across investor style types. We’ve done well in these chip stocks since inception and NVDA is currently a long, and we’re trying to “let winners run” while using sizing to risk manage these names due to the market-wide positioning bias in semiconductors.”

2. NVIDIA Corporation (NASDAQ:NVDA)

Number of Hedge Fund Holders: 173

NVIDIA Corporation has been a household name in the gaming and esports industry due to its high-performance graphics processing units. NVIDIA Corporation provides specialized hardware for Battle Royale games. The company’s GeForce graphics cards and NVIDIA G-SYNC power many competitive games like PlayerUnknown’s Battlegrounds, Counter-Strike: Global Offensive, and DOTA 2.

Additionally, due to the AI trend, the company hit a market cap of $1 trillion in May 2023, and it took less than a year for the company to become the first chipmaker to hit a $2 trillion market cap. NVIDIA Corporation achieved this milestone on February 23. The stock was held by 173 hedge funds in Q4 with positions worth $33.76 billion. As of the fourth quarter, GQG Partners is the most dominant shareholder and has a position worth $6.88 billion.

On February 22, NVIDIA Corporation declared a quarterly dividend of $0.04, payable by March 27 to the shareholders of record on March 6. As of March 8, the stock’s dividend yield is 0.02%. 

On February 21, NVIDIA Corporation posted its Q4 non-GAAP EPS of $5.16, which beat the estimates by $0.52. The revenue of $22.1 billion grew 265.3% YoY, and topped the estimates by $1.55 billion.

Fred Alger Management mentioned NVIDIA Corporation in its fourth quarter 2023 investor letter. Here is what it said:

“NVIDIA Corporation is a leading supplier of graphics processing units (GPUs) for a variety of end markets, such as gaming, PCs, data centers, virtual reality and high-performance computing. The company is leading in most secular growth categories in computing, and especially artificial intelligence and super- computing parallel processing techniques for solving complex computational problems. Simply put, Nvidia’s computational power is a critical enabler of Al and therefore critical to Al adoption, in our view. During the period, shares contributed to performance as Nvidia reported solid fiscal third quarter results well above analyst expectations, driven by strong demand from data centers. Growing Al data center workloads are driving demand for the increased interconnections and fully accelerated software stacks, thereby enabling leading application performance and fast result times.”

1. Microsoft Corporation (NASDAQ:MSFT)

Number of Hedge Fund Holders: 302

Microsoft Corporation was already a big name in the video gaming industry, and on top of that, it acquired Activision Blizzard in 2023. Activision Blizzard has produced several renowned online games such as World of Warcraft, Overwatch,  Heroes of the Storm, and more.  It is the top stock on our list of best esports stocks to buy now.

In the last three months, 33 Wall Street analysts covered Microsoft Corporation, and 31 kept a Buy rating on the stock. The average price target of $469.34 represents an upside of 15.54% as of March 8.

According to our database, 302 hedge funds held stakes in Microsoft Corporation in the fourth quarter of 2023. With 38.21 million shares of the company, valued at $14.37 billion, the Bill & Melinda Gates Foundation Trust is the largest shareholder of the company, as of December 31, 2023.

RiverPark Advisors stated the following regarding Microsoft Corporation in its fourth quarter 2023 investor letter:

“Microsoft Corporation: MSFT was a top contributor in the quarter following strong FY1Q24 earnings in late October. In that earnings report, MSFT delivered better-than-expected revenue (+13%) and earnings (+27%), with growth in both accelerating from the prior quarter. All three major segments grew revenue faster than expected, highlighted by 28% constant currency growth in Azure, the company’s cloud offering. This marked the first quarter-over-quarter acceleration for Azure in six quarters. Operating margins (48%) were 400 basis points better than expected and earnings came in 13% ahead of expectations.

Cloud-based services have become the company’s largest revenue and earnings producer. The company’s Azure platform alone has the potential to grow to more than $100 billion in annual revenue over the next decade. Overall, we believe that the company will continue to deliver double-digit revenue and EPS growth and generate an enormous amount of free cash flow to both return to shareholders and use for acquisitions.”

You can also look at the 17 Worst Bachelor’s Degrees for Student Loan Debt and 15 Best Stocks to Buy According to Billionaire D.E. Shaw.

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Disclosure. None. 11 Best Esports Stocks to Buy Now is originally published on Insider Monkey.