In this article, we will take a look at the 5 best mobile gaming stocks to buy now. To see more such companies, go directly to 10 Best Mobile Gaming Stocks to Buy Now.
5. NetEase, Inc. (NASDAQ:NTES)
Number of Hedge Fund Holders: 31
On March 1, NetEase, Inc. (NASDAQ:NTES) jumped after JPMorgan upgraded NTES to Overweight to Neutral. The firm is bullish on the stock based on the upcoming game launches.
JPMorgan’s analyst Daniel Chen noted NetEase, Inc. (NASDAQ:NTES) is slated to launch nine games this year, starting from Westward Journey Returns.
The analyst also expects NetEase, Inc. (NASDAQ:NTES)’s revenue growth to increase from 1% in the fourth quarter to 8% and 9% in the second and third quarters, respectively, on a year-over-year basis.
NetEase, Inc. (NASDAQ:NTES) saw a sharp rise in hedge fund sentiment during the fourth quarter. A total of 31 hedge funds tracked by Insider Monkey entered the first quarter of 2023 with NetEase, Inc. (NASDAQ:NTES) in their portfolios, compared to 24 hedge fund investors which had stakes in the company at the end of the third quarter of 2022.
4. Electronic Arts Inc (NASDAQ:EA)
Number of Hedge Fund Holders: 46
Electronic Arts is a giant in the mobile gaming space, with some of the most popular games under its belt, including FIFA, NBA Live Mobile Basketball, F1 Mobile Racing, Real Racing 3, Apex Legends Mobile, among many others. Electronic Arts recently said it will reduce its workforce by 6% as the company’s board approved a restructuring plan.
In January, the company posted its fiscal third quarter results. GAAP EPS in the period came in at $0.73, beating estimates by $0.23.
As of the end of the last quarter of 2022, 46 hedge funds tracked by Insider Monkey had stakes in the company. The most significant shareholder of the company is Cliff Asness’ AQR Capital Management which owns an $85 million stake in the company.
3. Take-Two Interactive Software, Inc. (NASDAQ:TTWO)
Number of Hedge Fund Holders: 53
Ranking 3rd in our list of the best mobile gaming stocks is Take-Two Interactive Software, Inc. (NASDAQ:TTWO), the company behind famous games like Grand Theft Auto and WWE.
Earlier this month, Bank of America upped its earnings and revenue estimates for Take-Two Interactive Software, Inc. (NASDAQ:TTWO). BofA believes Take-Two Interactive Software, Inc. (NASDAQ:TTWO)’s re-accelerating game pipeline is set to “de-risk” expectations for fiscal 2024 guidance. The firm had upgraded Take-Two Interactive Software, Inc. (NASDAQ:TTWO) to Buy back in November 2022.
Take-Two Interactive Software, Inc. (NASDAQ:TTWO) also recently agreed to sell $1 billion aggregate principal amount of its Senior Notes in an underwritten public offering.
Out of the 943 hedge funds tracked by Insider Monkey, 53 hedge funds reported owning stakes in Take-Two Interactive Software, Inc. (NASDAQ:TTWO) as of the end of the fourth quarter of 2022. The total worth of these stakes was $1.7 billion. The biggest hedge fund stakeholder of Take-Two Interactive Software, Inc. (NASDAQ:TTWO) was Steve Cohen’s Point72 Asset Management which owns a $297 million stake in the company.
Diamond Hill All Cap Select Strategy made the following comment about Take-Two Interactive Software, Inc. (NASDAQ:TTWO) in its Q4 2022 investor letter:
“Video game developer Take-Two Interactive Software, Inc. (NASDAQ:TTWO) has faced weakness in the mobile gaming market, in addition to game-launching delays. The company reported underwhelming quarterly results in Q4 and lowered its full-year guidance. After reexamining our long-term thesis, we decided to exit our position in favor of more attractive opportunities.”
2. Warner Bros. Discovery, Inc. (NASDAQ:WBD)
Number of Hedge Fund Holders: 60
Entertainment giant Warner Bros. Discovery, Inc. (NASDAQ:WBD) has several famous mobile games under its belt.
Warner Bros. Discovery, Inc. (NASDAQ:WBD) is having a remarkable year, having gained about 46% in the period through April 14.
Recently, Truist started covering Warner Bros. Discovery, Inc. (NASDAQ:WBD) with a Buy rating and a $19 price target. The firm’s analyst Matthew Thornton said Warner Bros. Discovery, Inc. (NASDAQ:WBD)’s HBO Max relaunch should “drive renewed subscriber and [average revenue per user] momentum.”
A total of 60 hedge funds tracked by Insider Monkey had stakes in Warner Bros. Discovery, Inc. (NASDAQ:WBD), up from 61 hedge funds in the previous quarter.
1. Activision Blizzard, Inc. (NASDAQ:ATVI)
Number of Hedge Fund Holders: 129
Activision Blizzard, Inc. (NASDAQ:ATVI)’s second quarter of last year report showed that the company’s mobile gaming division raked in more revenue than the console and PC divisions combined. Activision Blizzard, Inc. (NASDAQ:ATVI) is behind some of the biggest and most famous mobile games in the world, including COD Mobile and Candy Crush.
As of the end of the fourth quarter of 2022, 129 hedge funds tracked by Insider Monkey had stakes in Activision Blizzard, Inc. (NASDAQ:ATVI). The biggest stakeholder of Activision Blizzard, Inc. (NASDAQ:ATVI) is Berkshire Hathaway of Warren Buffett with a $4 billion stake.
Broyhill Asset Management made the following comment about Activision Blizzard, Inc. (NASDAQ:ATVI) in its Q4 2022 investor letter:
“Shares of Activision Blizzard, Inc. (NASDAQ:ATVI) gained 14% for the twelve months ending December 2022, but we managed to lose money on our investment, purchasing shares after Microsoft’s announced acquisition. In hindsight, we were too quick to establish our position upon announcement of the deal. What we initially saw as an attractive spread became much more attractive throughout the year. That being said, we’ve learned by experience that passing up fifty cent dollars laying on the street because they may be later mistaken for quarters, usually results in leaving a lot of money on the table. Most of the time, it’s not long before others come to the realization that they were, in fact, dollars all along. While we have to sometimes remind ourselves of this particular market peculiarity, we’ve also learned that the best approach is to pick up some of those fifty cent dollars when you see them, leaving some on the street to be picked up later should they be mistaken for quarters. In the case of Activision, we continued picking up shares on weakness throughout the year.
While seemingly daily headlines concerning the trials and travails of the pending acquisition have captivated investors and driven short-term volatility in the stock, we think consensus has completely overlooked the exceptional fundamentals of the business, which have inflected sharply higher. Activision recently reported fourth-quarter earnings per share of $1.87 or nearly 25% higher than the average analyst estimate of $1.52, which barely budged over the past three months. Performance was largely driven by the company’s flagship Call of Duty franchise, as Modern Warfare II posted record sales for an opening quarter. Management expects full-year revenue growth of “at least high teens,” which will likely be an outlier in a market full of declining estimates (more on this next). Bottom line: while shares have been rangebound, held at the mercy of regulators, we believe our margin of safety has increased during the year as investors appear uninterested or unaware of the company’s increasing long-term intrinsic value.”
You can also take a peek at 10 Most Profitable Small Businesses in 2023 and 10 Best April Dividend Stocks To Buy.
