In this article, we discuss 5 best gaming stocks to buy now. If you want to read our detailed analysis of the gaming industry and see some more gaming stocks, go directly to 10 Best Gaming Stocks To Buy Now.
5. Ubisoft Entertainment SA (OTC:UBSFY)
Number of Hedge Fund Holders: N/A
Ubisoft Entertainment SA (OTC:UBSFY) is a French developer and distributor of video games for consoles, PCs, and smartphones. Deutsche Bank analyst George Brown on June 23 initiated coverage of Ubisoft Entertainment SA (OTC:UBSFY) with a Buy rating and €60 price target. According to the analyst, the company has largely underperformed its video gaming peers over the last few years as investors “appear to have lost faith” due to consistent game delays, lowered guidance, and internal controversies. However, there are multiple organic drivers that he expects to generate upside, added the analyst, who also observed that lately there has also been chatter of private equity interest in Ubisoft Entertainment SA (OTC:UBSFY) that has supported the stock.
4. NetEase, Inc. (NASDAQ:NTES)
Number of Hedge Fund Holders: 29
NetEase, Inc. (NASDAQ:NTES) is a Chinese internet company that operates via Online Game Services, Youdao, Cloud Music, and Innovative Businesses and Others segments. Citi analyst Alicia Yap sees the recent selloff in shares of NetEase, Inc. (NASDAQ:NTES) as an “enhanced buying opportunity”. The analyst noted that the late release of Diablo Immortal in China is unfortunate, especially since competitors like Blizzard remain on schedule. The analyst sees controlled impact on NetEase, Inc. (NASDAQ:NTES)’s second half of 2022 financials if the release of the China version is delayed to July 8, which is two weeks later than the planned release. Small delays to Diablo Immortal release should not have a significant impact on the interest of core gamers, added the analyst. On June 16, the analyst assigned a Buy rating to the shares with a $132 price target and opened a “30-day positive catalyst watch” on NetEase, Inc. (NASDAQ:NTES) in anticipation of a possibly stronger than expected performance.
Among the hedge funds tracked by Insider Monkey, 29 funds reported owning stakes in NetEase, Inc. (NASDAQ:NTES) at the end of Q1 2022, compared to 35 funds in the earlier quarter. William B. Gray’s Orbis Investment Management is the leading position holder in the company, with 6.4 million shares worth roughly $578 million.
3. QUALCOMM Incorporated (NASDAQ:QCOM)
Number of Hedge Fund Holders: 73
QUALCOMM Incorporated (NASDAQ:QCOM) is a California-based semiconductor and wireless technology company that operates through three segments – Qualcomm CDMA Technologies (QCT), Qualcomm Technology Licensing (QTL), and Qualcomm Strategic Initiatives (QSI). Qualcomm Snapdragon Elite Gaming offers HDR quality graphics for smartphone and desktop-level gaming.
On June 21, Mizuho analyst Vijay Rakesh reiterated a Buy rating on QUALCOMM Incorporated (NASDAQ:QCOM) and lowered the price target on the stock to $168 from $185. The analyst sees the handset supply chain constraints, the slow China reopening, softer consumer demand, and surplus inventory as challenges. On June 28, BofA added QUALCOMM Incorporated (NASDAQ:QCOM) to its “US 1 List”, which is a collection of the firm’s top investment ideas from the universe of Buy-rated, U.S. listed stocks.
QUALCOMM Incorporated (NASDAQ:QCOM) was part of 73 hedge fund portfolios at the end of the first quarter of 2022, with collective stakes worth $3.5 billion. Alkeon Capital Management held the leading position in the company, comprising 4.10 million shares valued at $626.7 million.
Here is what ClearBridge Investments Large Cap Value Strategy has to say about QUALCOMM Incorporated (NASDAQ:QCOM) in its Q4 2021 investor letter:
“Market strength continued in the fourth quarter, with only the communication services sector down in the Russell 1000 Value Index. Portfolio returns benefited from the strong performance of semiconductor maker Qualcomm, which has executed exceptionally well in pursuing the transition to 5G, growing both content and share due to its leadership position in cellular technology. The chipmaker recently outlined a number of peripheral growth opportunities outside of mobile markets, including automotive (where it hopes to leverage its strong presence in the automotive infotainment space into advanced driver assistance systems), Internet of Things (including opportunities in the PC market, VR/AR market, and factory automation) and radio frequency (where mmWave adoption globally, including China, would drive substantial upside).”
2. The Walt Disney Company (NYSE:DIS)
Number of Hedge Fund Holders: 113
The Walt Disney Company (NYSE:DIS) is an American global entertainment company that functions through two segments – Disney Media and Entertainment Distribution and Disney Parks, Experiences and Products. The company has a separate gaming division, Disney Interactive Studios, that partners with third-party video game developers and builds games for iOS and Android under its label, Disney Mobile.
Morgan Stanley analyst Benjamin Swinburne assigned an Overweight rating to The Walt Disney Company (NYSE:DIS) on June 30 and lowered the price target on the stock to $125 from $170. The analyst lowered his Disney+ estimates to account for lost IPL cricket rights in India and softer demand, and he now expects 220 million subscribers in FY24. However, the analyst sees an attractive risk/reward at present share levels, noting that the stock is down 40% year-to-date and trading below The Walt Disney Company (NYSE:DIS)’s pre-Plus launch share price. He expects 20% to 25% adjusted EPS growth for the company over the next three years, he added.
The Walt Disney Company (NYSE:DIS) was part of 113 hedge fund portfolios at the end of March 2022, up from 111 in the preceding quarter. According to Insider Monkey’s data, Matrix Capital Management is the largest position holder in the company, with 6.33 million shares worth $868.2 million.
Here is what ClearBridge Investments Sustainability Leaders Strategy has to say about The Walt Disney Company (NYSE:DIS) in its Q4 2021 investor letter:
“The communication services sector was a weak spot in both the benchmark and the portfolio in the fourth quarter. Disney announced lower than expected streaming subscriber growth to the company’s Disney+ offering, attributable primarily to the content release schedule. Disney has been ramping up content spending given strong global response to Disney+, although production capability was temporarily impacted by COVID-19. We still believe Disney is on track to reach the subscriber outlook outlined at its December 2020 analyst day, driven by a very robust slate of content releases, particularly in the 2022–2024 time period.”
1. Alphabet Inc. (NASDAQ:GOOG)
Number of Hedge Fund Holders: 160
Alphabet Inc. (NASDAQ:GOOG) is the parent company of Google and Google subsidiaries. Google Cloud is frequently used for multi-player gaming experiences and developers employ it to enhance data insights and streamline infrastructure. In addition to that, Alphabet Inc. (NASDAQ:GOOG) owns DeepMind Technologies, a British artificial intelligence company that has created products like AlphaGo, AlphaStar, and AlphaZero. These products mimic human moves while playing video games like go, chess, and shogi.
On June 29, JPMorgan analyst Doug Anmuth reaffirmed an Overweight rating on Alphabet Inc. (NASDAQ:GOOG) but lowered the price target on the stock to $2,800 from $3,200. According to the analyst, the Internet sector continues to achieve secular growth, but it is far more mature as compared to 2008-2009. However, he believes demand-side expectations and most stock prices “already reflect a softer macro environment”.
According to Insider Monkey’s data, Alphabet Inc. (NASDAQ:GOOG) was found in 160 hedge fund portfolios at the end of Q1 2022, up from 158 funds in the preceding quarter. Chris Hohn’s TCI Fund Management is one of the leading shareholders of the company, with a position worth $6.62 billion.
Here is what Farrer Wealth Advisors said about Alphabet Inc. (NASDAQ:GOOG) in its Q1 2022 investor letter:
“Alphabet: We won’t waste much time trying to explain to our clients why Alphabet is such a phenomenal business, we believe that is quite self-evident. The better explanation is why we never bought Alphabet before. The reason was a personal bias we held based on three beliefs (which we now believe to be incorrect)
Growth in YouTube would stall as the increased ad-load would turn-off viewers (the double ad-load at the beginning of videos for example). Consumers will focus on discovery rather than search to purchase new items. For example – using Instagram/TikTok to decide what new clothes to buy instead of ‘googling’ for clothes. Other Bets: In general, we felt that capital spent on “Other Bets” has been a bit wasteful with the segment earning just around $3.1bn in revenue versus nearly $21bn in operating losses over the last five years…” (Click here to see the full text)
You can also take a look at 10 Dividend Stocks to Buy According to Bryan Hinmon’s Motley Fool Asset Management and Bill Gates’ Latest Stock Portfolio: Top 10 Picks.
