8 Best Esports Stocks to Buy According to Hedge Funds

3. Roblox Corporation (NYSE:RBLX)

Number of Hedge Fund Holders: 54

Roblox Corporation (NYSE:RBLX) is a leading American video game developer that ranks among the top 3 on our list of the best esports stocks to buy according to hedge funds. The company created Roblox, a versatile gaming platform that lets users design, share, and play games made by other users. With free access to millions of games, Roblox generates revenue through in-game purchases using its virtual currency, Robux. This model not only attracts a large player base but also encourages developers to create engaging content, as they can earn Robux that can be converted into real money.

In 2021, Dubit, a game studio focused on the Metaverse and esports, raised $8 million to launch the first live esports league in the Metaverse on Roblox. This initiative highlights the growing interest in competitive gaming within virtual environments. Additionally, Roblox hosts numerous community-run esports tournaments, further establishing its role as a key platform for esports engagement.

In Q2 2024, Roblox Corporation (NYSE:RBLX) reported strong financial growth, with revenue reaching $893.5 million, a 31% increase year-over-year. The platform saw a record 79.5 million average daily active users, reflecting a 21% growth from the previous year. These impressive metrics highlight the platform’s popularity and engagement, making it an attractive investment.

The company is also expanding its offerings beyond gaming. During the Q4 2024 earnings call, management shared that Roblox Corporation (NYSE:RBLX) is venturing into e-commerce by partnering with Walmart to test shopping experiences within the platform. The company’s diversification into social interaction, shopping, and education enhances its business model.

Hours engaged hit a record 17.4 billion in Q2 2024, up 24% compared to the same period in the previous year, with significant growth in key markets like Japan and India. With its strong user engagement and ongoing expansion into new areas, Roblox Corporation (NYSE:RBLX) presents a compelling opportunity for investors looking to increase their exposure to the esports market.

The combination of a robust gaming platform and innovative business strategies positions Roblox Corporation (NYSE:RBLX) for continued growth in the dynamic gaming landscape. According to Insider Monkey’s Q2 2024 database, 54 hedge funds held stakes in Roblox Corporation (NYSE:RBLX) as of the second quarter.