12 Best Gaming Stocks To Buy Now

Published October 14, 2022 at 12:32 pm EDT Updated August 31, 2026 at 8:39 pm EDT

In this article, we discuss 12 best gaming stocks to buy now.

According to PwC’s Global Entertainment and Media Outlook, the gaming industry is rapidly growing and the sector is anticipated to reach $321 billion by 2026. The expansion is supported by millions of people who got involved with gaming to escape the isolation of COVID-19 lockdowns. Gaming was one of the safest ways to maintain social connections amid the pandemic-driven chaos, and the sector has not lost steam despite lockdowns lifting worldwide.

Existing and new gamers poured into games, consoles, and other gaming equipment during the pandemic, and resultantly, the market grew by 26% between 2019 and 2021. Companies timed their new releases and game launches strategically to gain from the pandemic boom. For example, Nintendo’s Animal Crossing: New Horizons was launched in March 2020 and within the first six weeks, 13.4 million units were sold. It features as one of the best-selling Nintendo Switch games.

As per latest data published by DataReportal, internet traffic rose by 7.7% in 2021 compared to 2020. Moreover, the number of internet users grew by 4% to 4,950 million in January 2022 compared to the same period last year, when the users equaled 4,758 million. Using cloud technology in the gaming market will potentially boost the demand and engagement of multiplayers for numerous games, which will support further market growth. Some of the best gaming stocks to consider in order to play the boom in the sector include Sea Limited (NYSE:SE), Microsoft Corporation (NASDAQ:MSFT), and NVIDIA Corporation (NASDAQ:NVDA).

Our Methodology

We selected the following gaming stocks based on positive analyst coverage, strong business fundamentals, and future growth prospects. We have assessed the hedge fund sentiment from Insider Monkey’s database of 895 elite hedge funds tracked as of the end of the second quarter of 2022.

Photo by Erik Mclean on Unsplash

Best Gaming Stocks To Buy Now

12. Nintendo Co., Ltd. (OTC:NTDOY)

Number of Hedge Fund Holders: 2

Nintendo Co., Ltd. (OTC:NTDOY) was founded in 1889 and is headquartered in Kyoto, Japan. The company develops, manufactures, and sells home entertainment products in Japan, the Americas, Europe, and internationally. Nintendo Co., Ltd. provides video game platforms, playing cards, handheld and home console hardware systems, and related software. A depreciating yen will act as a tailwind for Nintendo Co., Ltd.’s reported financials.

On September 7, Goldman Sachs analyst Minami Munakata resumed coverage of Nintendo Co., Ltd. with a Buy rating and an 83,000 yen price target. The analyst expects Nintendo Co., Ltd. to sustain an elevated level of earnings, even in the midst of the product cycle for Nintendo Switch, the analyst told investors.

According to Insider Monkey’s second quarter database, Andrew Wellington and Jeff Keswin’s Lyrical Asset Management and Frederick Disanto’s Ancora Advisors collectively held stakes worth $738,000 in Nintendo Co., Ltd..

Like Sea Limited, Microsoft Corporation, and NVIDIA Corporation, Nintendo Co., Ltd. is one of the best gaming stocks to buy now.

Here is what Ensemble Capital has to say about Nintendo Co., Ltd. in its Q3 2021 investor letter:

“Nintendo: Having had a banner year and a quarter last year with both its Switch console sales and megahit Animal Crossing: New Horizons game release, helped in part by COVID restrictions, Nintendo posted sales that were down -10% vs a year ago while operating income was down -17%. Consequently, the stock has had a challenged performance in the quarter, falling 19%. However, looking past the one-time nature of the comparison effects of the COVID bump last year, the more important fundamental metric to track for the company’s future business is its installed base of Switch consoles. The Switch installed base of customers has grown by about 50 million units to over 85 million since 2019, aided by a surge in interest in family gaming. We believe the family gaming trend is an important and persistent one and the huge increase in the installed base bodes well for future game and digital subscription sales going forward.”

11. Corsair Gaming, Inc. (NASDAQ:CRSR)

Number of Hedge Fund Holders: 10

Corsair Gaming, Inc. (NASDAQ:CRSR) is a California-based company that designs, markets, and distributes gaming and streaming equipment, components, and systems in the Americas, Europe, the Middle East, and the Asia Pacific. The company offers gaming peripherals such as gaming keyboards, mice, headsets, controllers, capture cards, stream decks, USB microphones, studio accessories, and EpocCam software. Corsair Gaming, Inc. is one of the best gaming stocks to invest in.

After Corsair Gaming, Inc. negatively pre-announced its Q2 revenue and adjusted EBITDA along with its earnings date announcement, Wedbush analyst Michael Pachter noted that slower user growth will likely extend Corsair Gaming, Inc.’s upgrade cycle in the short-term, though he acknowledged that Q2 is “likely the trough.” The analyst, who expects a return to “normal” in 2023 “at the latest,” reiterated an Outperform rating and a $22 price target on Corsair Gaming, Inc. shares. He is positive that Corsair Gaming, Inc. has developed a “defensible niche” with a majority of its sales originating from “a small, but dedicated and growing base of hard-core gamers.”

According to Insider Monkey’s data, 10 hedge funds were long Corsair Gaming, Inc. at the end of Q2 2022, compared to 12 funds in the prior quarter. Ken Griffin’s Citadel Investment Group is a prominent position holder in the company, with 547,574 shares worth $7.19 million.

Here is what Sterling Partners Equity Advisors has to say about Corsair Gaming, Inc. in its Q4 2021 investor letter:

“Corsair Gaming is a global developer and manufacturer of high-performance gear and technology for gamers, content creators, and PC enthusiasts. Corsair delivers a full ecosystem of products; PC Components, Peripherals, Premium Streaming Equipment, and Smart Ambient Lighting. Corsair responded to the difficult sourcing and shipping environment by building inventory closer to its customers. Management believes that once this difficult supply chain is behind them their targeted growth and profitability targets will return. We believe in the growing gaming market globally and Corsair is positioned well to support this growing customer base with a platter of products.”

10. Golden Entertainment, Inc. (NASDAQ:GDEN)

Number of Hedge Fund Holders: 21

Golden Entertainment, Inc. (NASDAQ:GDEN) is headquartered in Las Vegas, Nevada, and the company is engaged in the ownership and operation of a diversified entertainment platform in the United States. Golden Entertainment, Inc. has four key segments – Nevada Casino Resorts, Nevada Locals Casinos, Maryland Casino Resort, and Distributed Gaming. The Distributed Gaming segment operates slot machines and amusement devices in non-casino locations, including restaurants, bars, liquor stores, and grocery stores.

Jefferies analyst Cassandra Lee on September 7 assumed coverage of Golden Entertainment, Inc. with a Buy recommendation and a $64 price target. Given the company’s “balance sheet strength and strong fundamentals” across regional markets in Nevada, it could chase growth more intensely or increase shareholder returns with the proceeds from Rocky Gap sale, “either of which imply continued upside,” the analyst told investors in a bullish thesis.

Among the hedge funds tracked by Insider Monkey, 21 funds reported owning stakes worth $163.6 million in Golden Entertainment, Inc. at the end of June 2022, compared to 21 in the prior quarter worth $276.2 million. Richard Driehaus’ Driehaus Capital is the leading position holder in the company, with 1.13 million shares valued at nearly $45 million.

9. PENN Entertainment, Inc. (NASDAQ:PENN)

Number of Hedge Fund Holders: 33

Next on our list of the best gaming stocks is PENN Entertainment, Inc. (NASDAQ:PENN), a Pennsylvania-based company that provides integrated entertainment, sports content, and casino gaming experiences in North America. On October 10, PENN Entertainment, Inc. signed a new leasing arrangement with Gaming and Leisure Properties, Inc. (NASDAQ:GLPI) to promote casino growth and relocations. The transaction is subject to regulatory approvals and is expected to be effective from January 1, 2023.

On October 6, Canaccord analyst Jason Tilchen initiated coverage of PENN Entertainment, Inc. with a Buy rating and a $50 price target. Commercial gambling in the U.S. exceeded $50 billion in gross gaming revenue for the first time last year, noted the analyst, who forecasts the industry to nearly double over the next decade. At present levels, investors can access “a very reasonably valued, consistent, and strongly profitable regional casino business” with upside from the quickly expanding online sports betting and iGaming markets, the analyst added.

According to Insider Monkey’s data, 33 hedge funds were long PENN Entertainment, Inc. at the end of the second quarter of 2022, compared to 36 funds in the preceding quarter. Parag Vora’s HG Vora Capital Management is the largest stakeholder of the company, with 3.50 million shares worth $106.5 million.

Here is what Baron Funds specifically said about PENN Entertainment, Inc. in its Q2 2022 investor letter:

“PENN Entertainment, Inc. declined 28.3% in the quarter and penalized performance by 71 bps. This was due to investor concerns that a potential recession would result in a slowdown or decline in growth. The company has seen no material change to its visitation or spending levels, and its earnings remain strong. Penn is generating strong cash flow to more than offset investments in its digital growth opportunity. It is using excess cash to buy back its stock. Penn is well positioned to weather a slowdown or recession and, if one does occur, the company should still generate revenue and EBITDA above pre-pandemic levels.

Management continues to use its excess cash for share repurchases and debt reduction as well as continuing investments in its digital businesses. We think the $50 million of losses this year from its digital business is modest in relation to Penn’s $1 billion of casino EBITDA. The losses from its digital business represent customer acquisition costs incurred as additional states legalize online gambling. Since it is far less expensive to retain existing customers than to acquire new ones, we expect marketing costs to decline as Penn builds its customer base.

Penn’s core bricks and mortar casino business remains strong, and the company has a healthy regional casino business and a strong balance sheet to fund its digital losses.”

8. International Game Technology PLC (NYSE:IGT)

Number of Hedge Fund Holders: 34

International Game Technology PLC (NYSE:IGT) is a London-based company that provides gaming technology products and services in North America, Europe, the Middle East, Africa, Asia-Pacific, Latin America, and the Caribbean. The company has three primary segments – Global Lottery, Global Gaming, and Digital & Betting. On October 6, International Game Technology PLC announced that its cashless gaming solutions, Resort Wallet and IGTPay, were being used at Indigo Sky Casino in Wyandotte, Okla. International Game Technology PLC is helping multiple casino operators such as Indigo Sky Casino transition to cashless gaming and modernize the guest experience. It is one of the best gaming stocks to buy now.

On August 3, Deutsche Bank analyst Carlo Santarelli reiterated a Buy rating on International Game Technology PLC but trimmed the price target on the stock to $30 from $35 after the “solid” Q2 results.

Among the hedge funds tracked by Insider Monkey, International Game Technology PLC was part of 34 public stock portfolios at the end of Q2 2022, with collective stakes worth $263.5 million. John Overdeck and David Siegel’s Two Sigma Advisors is a significant position holder in the company, with 1.86 million shares valued at $34.6 million.

Here is what Palm Harbour Capital has to say about International Game Technology PLC in its Q4 2021 investor letter:

“The second largest contributor was International Game Technology, the ItalianAmerican lottery and slot machine company, which we introduced in our first quarter 2020 letter and which contributed 78 basis points to performance. Early in the quarter, IGT’s main competitor, the highly levered Scientific Games, entered into a definitive agreement to sell its lottery business to Brookfield Business Partners for total consideration of $6.1 billion in cash and contingent payout. At $471 million last twelve months EBITDA (admittedly COVID affected, excluding unallocated central costs), Scientific Games lottery business was sold at trailing 13.0x. Scientific Games exited the lottery business to optimize the portfolio and aggressively de-lever its balance sheet. We believe IGT’s lottery business to be much higher quality and certainly larger. If we were to use a similar metric for IGT, including all corporate costs but excluding Gaming and Digital and Betting, we would have around 90% upside. We are willing to bet the Gaming and fast growing Digital and Betting segments are worth something as well. It seems the sell-side willfully ignores this transaction and sticks with their 7-8x EV/EBITDA valuation.

The company reported third quarter earnings with sales up by 21% year on year, EBIT up by 144% and leverage down to 3.8x from 6.4x at year-end 2020. Total Adjusted EBITDA improved by 42% with margin gaining 618 basis points. Following the recovery, management reinstated the dividend of $0.20 per share…” (Click here to see the full text)

7. Boyd Gaming Corporation (NYSE:BYD)

Number of Hedge Fund Holders: 35

Featuring next on our list of the best gaming stocks is Boyd Gaming Corporation (NYSE:BYD), a Las Vegas-based multi-jurisdictional gaming company that owns entertainment properties in Nevada, Illinois, Indiana, Iowa, Kansas, Louisiana, Mississippi, Missouri, Ohio, and Pennsylvania. On September 15, Boyd Gaming Corporation declared a quarterly dividend of $0.15 per share, in line with previous. The dividend is payable on October 15, to shareholders of record as of September 30.

JMP Securities analyst Jordan Bender initiated coverage of Boyd Gaming Corporation on September 23 with an Outperform rating and a $65 price target. The macro backdrop in Nevada, including home prices and taxable sales, remains solid, driving a robust spend per head in the locals/downtown market where Boyd Gaming Corporation generates 39% of its earnings, the analyst told investors. He noted that Nevada is one of the healthiest gaming markets.

According to Insider Monkey’s Q2 data, 35 hedge funds were long Boyd Gaming Corporation, compared to 40 funds in the earlier quarter. John W. Rogers’ Ariel Investments is a notable position holder in the company, with 3.35 million shares worth $167 million.

Here is what Baron Real Estate Fund has to say about Boyd Gaming Corporation in its Q2 2022 investor letter:

“Boyd Gaming Corporation is one of the largest and most successful casino entertainment companies in the U.S. The company owns and operates 28 casino gaming properties in 10 states with a large presence in Las Vegas. Business conditions have been strong, yet the shares are valued at only 6 times 2022 estimated cash flow versus a long-term average of more than 9 times cash flow. The company maintains a strong and liquid balance sheet. Insiders own approximately 27% of the company. We believe Boyd is a compelling acquisition target.”

6. Roblox Corporation (NYSE:RBLX)

Number of Hedge Fund Holders: 38

Roblox Corporation (NYSE:RBLX) was incorporated in 2004 and is headquartered in San Mateo, California. The company develops and operates an online entertainment, gaming, and educational platform. In August, Roblox Corporation reported a year-over-year increase in daily active users, estimated bookings, and estimated revenue.

On October 13, BTIG analyst Clark Lampen maintained a Buy rating on Roblox Corporation but lowered the price target on the shares to $51 from $58. The analyst updated his estimates ahead of the September metrics to factor in “more conservative monetization assumptions and sustained hourly monetization headwinds”. He remains optimistic on the stock in the longer term, citing his latest checks with mobile gaming developers and ad executives, who have been constructive on the opportunity for in-gaming advertising for Roblox Corporation.

According to Insider Monkey’s data, Roblox Corporation was part of 38 hedge fund portfolios at the end of Q2 2022, compared to 40 funds in the prior quarter. Jim Simons’ Renaissance Technologies is the leading stakeholder of the company, with 11.6 million shares worth $380.5 million.

In addition to Sea Limited, Microsoft Corporation, and NVIDIA Corporation, Roblox Corporation is one of the best gaming stocks to play the boom in the sector.

Tao Value, an investment management firm, discussed the performance of Roblox Corporation in its Q4 2021 investor letter. Here’s what the fund said:

“Roblox (RBLX) got significant more attention from both institutional & retail investors after Facebook announced to rename itself as Meta Platforms. I believe the price appreciation is largely attributed to the increased attention. On the business side, Roblox rolled out a few successful music events and also partnered with Netflix on testing long-form media consumption in the virtual world. Apple in its iOS 14.5 rolled out an impactful change for the digital advertising landscape by requiring all apps to ask users to “opt in”.

5. Las Vegas Sands Corp. (NYSE:LVS)

Number of Hedge Fund Holders: 42

Las Vegas Sands Corp. (NYSE:LVS) develops, owns, and operates integrated resorts, including The Venetian Macao Resort Hotel, the Londoner Macao, The Parisian Macao, The Plaza Macao, Four Seasons Hotel Macao, Cotai Strip, the Sands Macao, and Marina Bay Sands in Singapore. The resorts feature accommodations, gaming, entertainment and retail malls, convention and exhibition facilities, and celebrity chef restaurants, among other amenities. Las Vegas Sands Corp. is one of the best gaming stocks to buy now.

On October 13, BofA analyst Shaun Kelley upgraded Las Vegas Sands Corp. to Neutral from Underperform with an unchanged price target of $37. Uncertainty around Macau remains high, but the risk for Macau is now lower as compared to ten months ago, the analyst told investors in a research note. Las Vegas Sands Corp. shares offer “substantial positive estimate revision potential”, as per the analyst. On September 26, Jefferies analyst David Katz upgraded Las Vegas Sands Corp. to Buy from Hold.

According to Insider Monkey’s data, 42 hedge funds were long Las Vegas Sands Corp. at the end of the second quarter of 2022, up from 39 funds in the last quarter. Ken Griffin’s Citadel Investment Group is a prominent stakeholder of the company, with 3.6 million shares worth about $122 million.

Here is what Baron Real Estate Fund has to say about Las Vegas Sands Corp. in its Q2 2022 investor letter:

“Certain travel-related businesses remain cyclically depressed, not secularly challenged and should rebound as economic strength re-emerges. For example, the business operations of Macau-centric casino and gaming companies such as Las Vegas Sands Corporation have yet to recover due to the ongoing COVID-19 challenges in China. We expect business to rebound sharply when economic growth recovers just as it did in Las Vegas. Las Vegas Sands Corporation is a global leader in the development and operation of luxury casino resorts in Macau and Singapore, and it maintains a liquid and investment grade balance sheet. It is currently valued at a significant discount to our assessment of replacement cost, and the company’s Macau operations are valued at only 7 times estimated cash flow.”

4. Sea Limited (NYSE:SE)

Number of Hedge Fund Holders: 65

Sea Limited is a Singapore-based company engaged in the digital entertainment, e-commerce, and digital financial service businesses in Asia, Latin America, and internationally. Sea Limited’s Garena digital entertainment platform offers users access to mobile and PC online games, entertainment content, live streaming of gameplay, and online forums for user communication. Sea Limited features as one of the best gaming stocks to buy now.

On August 17, Stifel analyst Scott Devitt assigned a Buy rating to Sea Limited but slashed the price target on the shares to $95 from $105 after the company reported mixed Q2 results and retracted e-commerce guidance for the full year, citing heightened macro uncertainty. While he lowered his growth estimates for the second half to factor in the unpredictable macro backdrop, the analyst remains positive on the long-term trajectory of Sea Limited’s margin improvements as management prioritizes profitability.

According to Insider Monkey’s data, 65 hedge funds were bullish on Sea Limited at the end of June 2022, compared to 77 funds in the prior quarter. Chase Coleman’s Tiger Global Management is the biggest stakeholder of the company, with 8.2 million shares worth $548 million.

In its Q1 2022 investor letter, Baron Funds, an asset management firm, highlighted a few stocks and Sea Limited was one of them. Here is what the fund said:

“Sea Limited, a global digital gaming and e-commerce company, detracted from performance for the period held. Similar to other online consumer businesses, Sea faced significant multiple compression in the quarter, exacerbated by a slowdown in user growth at its key Free Fire digital game and mounting investments in its e-commerce operation, particularly in new markets like Brazil. We exited our position as we lost confidence in the long- term unit economics in some of Sea’s new markets and were concerned by the simultaneous slowdown in revenue growth and increase in underlying cash burn.”

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

Number of Hedge Fund Holders: 66

Take-Two Interactive Software, Inc. (NASDAQ:TTWO) is one of the best gaming stocks to invest in. It is a New York-based company that develops, publishes, and markets interactive entertainment solutions for consumers worldwide. Some of its popular gaming franchises include Grand Theft Auto, Max Payne, Midnight Club, and Red Dead Redemption. Take-Two Interactive Software, Inc. recently acquired Zynga, an American developer providing social video game services.

On October 5, Goldman Sachs analyst Eric Sheridan upgraded Take-Two Interactive Software, Inc. to Buy from Neutral with a price target of $165, up from $131. The gaming industry continues to face short-term fundamental headwinds, but these headwinds are largely priced into the shares, the analyst told investors. The analyst sees some key industry themes and easier comps emerging after 2022, and he is also positive on the gaming industry’s latest moves to elevate the level of mobile gaming exposure and the upcoming “console cycle”.

According to Insider Monkey’s database, 66 hedge funds were long Take-Two Interactive Software, Inc. at the end of June 2022, compared to 58 funds in the preceding quarter. Andreas Halvorsen’s Viking Global is a significant stakeholder of the company, with nearly 2 million shares worth $245 million.

Here is what Madison Funds specifically said about Take-Two Interactive Software, Inc. in its Q2 2022 investor letter:

“Take-Two Interactive Software, Inc. is a leading publisher of video games. Take-Two has a reputation for the high quality of its games, having published industry favorites such as Grand Theft Auto and NBA2K.

The video game industry itself has shed much of its boom-and-bust patterns to become a steadier, more predictable business with high barriers to entry, established title franchises, and high levels of recurring, in-game revenue streams. The company has been investing heavily to step up the number of new title launches over the next few years, a favorable set-up which we believe is not fully reflected in its stock price.”

2. NVIDIA Corporation (NASDAQ:NVDA)

Number of Hedge Fund Holders: 84

NVIDIA Corporation is an American provider of graphics, computing, and networking solutions in the United States, Taiwan, China, and internationally. The company’s Graphics segment offers GeForce GPUs for gaming and PCs, the GeForce NOW game streaming service, and related infrastructure and solutions for gaming platforms. NVIDIA Corporation is one of the premier gaming stocks to consider.

On October 11, Citi analyst Atif Malik maintained a Buy recommendation on NVIDIA Corporation but lowered the price target on the shares to $210 from $248. The analyst trimmed estimates for cloud data-centric semis.

According to Insider Monkey’s second quarter database, 84 hedge funds held stakes worth $3.3 billion in NVIDIA Corporation, compared to 102 funds in the earlier quarter worth $6.3 billion. Ken Fisher’s Fisher Asset Management features as a prominent stakeholder of the company, with 7.6 million shares valued at $1.15 billion.

Here is what Baron Fifth Avenue Growth Fund has to say about NVIDIA Corporation in its Q2 2022 investor letter:

“At the company-specific level, there was a broad correction across the entire portfolio. While four of our holdings contributed to performance, the contribution to absolute returns was less than 100bps combined, as unfortunately none of them were large enough to move the needle. We had 16 investments detracting over 100bps each with NVIDIA, our second largest detractor, costing the Fund 254bps.

NVIDIA’s stock was hit even harder, down 44.4%, impacted by concerns over the health of the consumer, dramatic declines in crypto, and COVID-related lockdowns in China. Despite the sell-off and the increased near-term volatility in its gaming business, NVIDIA’s revenues grew 46% year-over-year with 48% operating margins, driven by continued strength in its data center business as companies across industries adopt AI and ML…” (Click here to see the full text)

1. Microsoft Corporation (NASDAQ:MSFT)

Number of Hedge Fund Holders: 258

Microsoft Corporation is one of the best gaming stocks to buy now. Microsoft Corporation offers PCs, tablets, gaming and entertainment consoles, and related hardware and software. The company also owns the Xbox network, an online multiplayer gaming platform. Microsoft is currently in the process of acquiring Activision Blizzard, Inc. (NASDAQ:ATVI), an American video game developer.

On September 20, Microsoft Corporation declared a $0.68 per share quarterly dividend, a 10.0% increase from its prior dividend of $0.62. The dividend is payable on December 8, to shareholders of record as of November 17.

Wells Fargo analyst Michael Turrin on October 12 reaffirmed an Overweight rating on Microsoft Corporation but lowered the price target on the shares to $315 from $350 ahead of two upcoming potential catalysts, namely the Ignite Conference and Q1 earnings.

According to Insider Monkey’s data, 258 hedge funds were bullish on Microsoft Corporation at the end of June 2022, compared to 259 funds in the prior quarter. Chris Hohn’s TCI Fund Management is a prominent stakeholder of the company, with 19.6 million shares worth over $5 billion.

Here is what Lakehouse Capital specifically said about Microsoft Corporation in its September letter:

“During the month, the Fund initiated a new position in Microsoft Corporation, a name that is no doubt familiar to our investors. The company was founded by Bill Gates and Paul Allen in a friend’s garage in 1975 and began dominating the operating system market with MS-DOS by the mid-1980s. The company has come a long way since then and is now widely considered the most critical and indispensable IT mega-vendor for businesses globally. In addition to its well-known Windows operating systems and Office productivity suite, the company has a broad portfolio of strategic products, including a rapidly growing public cloud business in Azure and a sizeable gaming presence.

Microsoft’s foundational products, Office365 and Windows365, are ubiquitous and highly penetrated with circa 90% and 80% market share, respectively. These solutions are deeply ingrained in commercial and personal use globally and across all industry sectors. They serve as stable, high-margin cash flow generators for Microsoft whilst they expand and invest in other growth areas of the business. One particular growth area, which is the most exciting part of Microsoft’s business in our view, is their public cloud service, Azure.

Azure has grown at a rapid clip over the past decade to cement itself as the second-largest cloud service provider globally, behind Amazon Web Services. The business benefits from strong secular tailwinds as cloud adoption continues unabated and there is considerable runway ahead – it’s currently estimated that less than 20% of global IT spend is currently in the cloud. Research indicates that 80% of enterprises use Azure and its market share has grown to 21%, up from 13% five years ago. The mission-critical nature of the product, which is similar to many of Microsoft’s other solutions, is incredibly attractive as it leads to sticky, recurring revenue streams. Something we love to see…” (Click here to read the full text)

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