5 Best Video Game Stocks to Buy Now

1. Microsoft Corporation (NASDAQ:MSFT)

Number of Hedge Fund Holders: 259

Microsoft Corporation (NASDAQ:MSFT) is the largest software producer in the world by revenue. Microsoft Corporation (NASDAQ:MSFT) is the creator of the Xbox gaming console. As of March 2023, the company has sold over 18.5 million Xbox Series X and Series S consoles since it was launched.

Microsoft Corporation (NASDAQ:MSFT) operates its video games division through Xbox Game Studios. In 2015, the division acquired the Swedish game developer, Mojang Studios. In February 2022, the company also announced the acquisition of Activision Blizzard, Inc. (NASDAQ:ATVI) for $69 billion. However, UK’s regulatory authority blocked the deal on April 26 stating competition concerns. According to the regulatory body, Microsoft Corporation (NASDAQ:MSFT) already covers 60% to 70% of the cloud gaming market.

Microsoft Corporation (NASDAQ:MSFT) announced its Q3 2023 results on April 25. The company reported an EPS of $2.45, outperforming the estimates by 22 cents. Moreover, the company generated $52.86 billion in revenue, representing a 7% increase from the same quarter of 2022 and exceeded the estimates by $1.85 billion.

Polen Capital made the following comment about Microsoft Corporation (NASDAQ:MSFT) in its Q1 2023 investor letter:

“Microsoft Corporation (NASDAQ:MSFT)’s fundamentals have largely stayed intact despite the headwinds many technology companies are facing due to the macroeconomic environment. While growth has decelerated below our longer-term target (we expect low-double-digit revenue growth over the next 3-5 years), we believe the deceleration should prove to be ephemeral. Azure and Office Commercial remain bright spots, while Windows OEM has been and will continue to be a drag over the next few quarters. With respect to Azure, even at a decelerated rate, the business continues to grow well. After eight consecutive quarters of Azure’s top line growth being in the mid-to-high-40s range, over the last two quarters, growth has been 42% and 38%, respectively. Microsoft is a scaled business with multiple and interlocking competitive advantages, and we believe the company will compound at high rates for a long period of time.”

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