8 Best Esports Stocks to Buy According to Hedge Funds

6. NetEase Inc. (NASDAQ:NTES)

Number of Hedge Fund Holders: 35

NetEase Inc. (NASDAQ:NTES) is a prominent Chinese internet technology company that specializes in gaming, education, and e-commerce. It has developed a diverse range of popular mobile and PC games for both domestic and international markets. By creating its own titles and partnering with global companies, NetEase has steadily expanded its gaming portfolio.

On March 27, 2024, the company announced a partnership with Sandsoft Games to establish a joint venture aimed at game publishing and esports activities in the MENA region. This collaboration combines NetEase’s (NASDAQ:NTES) extensive gaming experience with Sandsoft’s local expertise, positioning the company to tap into one of the fastest-growing gaming markets while supporting Saudi Arabia’s Vision 2030.

During Q2 2024, NetEase Inc. (NASDAQ:NTES) launched several successful games, including the multiplayer survival game Once Human, which quickly attracted over 230,000 peak concurrent users shortly after its release in July. The game topped Steam’s sales top-seller chart in 12 countries after an update in August, achieving over 10 million downloads. Additionally, the company launched its battle royale game Naraka: Bladepoint Mobile in late July. The game gained the third spot on the iOS grossing chart shortly after launch.

In Q2 2024, the company reported a total net revenue of $3.5 billion, a 6% increase from the same quarter in 2023. Revenue from games and related services grew by 7%, driven largely by mobile titles like Identity V and Justice Mobile. Mobile games accounted for about 76.4% of total online game revenue, highlighting their critical role in the company’s growth strategy.

With a compound annual growth rate (CAGR) of 26% in revenue and 20% in net income over the past decade, NetEase Inc. (NASDAQ:NTES) presents an attractive investment opportunity in the booming mobile gaming market. Its strategic partnerships and successful game launches position it well for future growth in the esports sector.

According to Insider Monkey’s Q2 database of over 900 hedge funds, 35 hedge funds held stakes in NetEase Inc. (NASDAQ:NTES). As of June 30, Orbis Investment Management holds 1.9 million shares of the company, valued at $182.28 million, making it NetEase Inc.’s (NASDAQ:NTES) most prominent shareholder.