5 Best Esports Stocks to Buy Now

In this article, we discuss the 5 best esports stocks to buy now. To read a detailed analysis of the esports and video gaming industry, go directly to the 11 Best Esports Stocks to Buy Now.

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 (NYSE:SE) 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 (NYSE:SE) 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 (NYSE:SE) in its September 2023 investor letter:

“The biggest contributor to performance during the month was Sea Limited (NYSE:SE) (+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 (NASDAQ:TTWO) 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. (NASDAQ:TTWO) 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. (NASDAQ:TTWO), 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. (NASDAQ:AMD) 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. (NASDAQ:AMD) 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. (NASDAQ:AMD), 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 (NASDAQ:AMD) stock and raised the price target from $187 to $245 on the shares.

Jackson Peak Capital stated the following regarding Advanced Micro Devices, Inc. (NASDAQ:AMD) 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. (NASDAQ:AMD)) 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 (NASDAQ:NVDA) has been a household name in the gaming and esports industry due to its high-performance graphics processing units. NVIDIA Corporation (NASDAQ:NVDA) 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 (NASDAQ:NVDA) 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 (NASDAQ:NVDA) 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 (NASDAQ:NVDA) 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 (NASDAQ:NVDA) in its fourth quarter 2023 investor letter. Here is what it said:

“NVIDIA Corporation (NASDAQ:NVDA) 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 (NASDAQ:MSFT) 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 (NASDAQ:MSFT), 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 (NASDAQ:MSFT) 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 (NASDAQ:MSFT) in its fourth quarter 2023 investor letter:

“Microsoft Corporation (NASDAQ:MSFT): 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.

Insider Monkey focuses on uncovering the best investment ideas of hedge funds and investors. Please subscribe to our daily free newsletter to get the latest investment ideas from hedge funds’ investor letters by entering your email address below.