7 Most Profitable Gaming Stocks To Invest In

1. Microsoft Corporation (NASDAQ:MSFT)

TTM Net Income: $88.14 Billion

5-Year Net Income CAGR: 17.57%

Number of Hedge Fund Holders: 279

Microsoft Corporation (NASDAQ:MSFT) is a leading player in the technology sector. The company is known for its development of Xbox consoles and gaming services. It has also made a number of acquisitions to grow its gaming business. In October 2023, the company made headlines with its acquisition of Activision Blizzard for approximately $69 billion, which significantly boosted its gaming portfolio. This acquisition includes popular franchises like Call of Duty and Warcraft, positioning Microsoft as one of the largest gaming companies globally. Such strategic moves not only enhance its offerings but also open new revenue streams across mobile, PC, console, and cloud gaming platforms.

In its financial report for the fiscal fourth quarter of 2024, Microsoft Corporation (NASDAQ:MSFT) showcased impressive growth, with total revenue reaching $64.7 billion, reflecting a 15% increase from the same quarter in the previous year. The gaming division was a standout performer, experiencing a remarkable 44% rise in revenue. Xbox content and services saw a 61% surge in revenue as well. Growth in these businesses was largely driven by the Activision Blizzard deal.

The company also highlighted its expanding user base in gaming, which now exceeds 500 million monthly active users across various platforms. This substantial engagement is further bolstered by the success of new titles and services, which continue to attract gamers.

Microsoft Corporation (NASDAQ:MSFT) has achieved a compound annual growth rate (CAGR) of 14.26% in its revenue over the past five years, while its net income has grown at a CAGR of 17.57% during the same period.

Overall, the company’s strong financial performance and strategic acquisitions in gaming make MSFT a compelling investment opportunity for those looking to capitalize on the growing gaming industry. As of the second quarter of 2024, Microsoft Corporation (NASDAQ:MSFT) was held by 279 hedge funds, according to Insider Monkey’s database.

Overall, MSFT ranks first among the 7 most profitable gaming stocks to invest in. While we acknowledge the potential of gaming companies, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than MSFT but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

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