1. Microsoft Corporation (NASDAQ:MSFT)
Number of Hedge Fund Holders: 279
Microsoft Corporation (NASDAQ:MSFT) is an American technology company that is mainly known for its software products like the Windows operating system. However, it is also a significant player in the esports market, largely due to its Xbox consoles and gaming services. A major factor that has enhanced the company’s standing in the esports industry was its acquisition of Activision Blizzard in October 2023, for approximately $69 billion. This acquisition brought popular franchises like Call of Duty, Warcraft, and Diablo under Microsoft’s umbrella, enhancing its gaming business across various platforms including mobile and cloud.
In its fiscal fourth quarter of 2024, Microsoft Corporation (NASDAQ:MSFT) reported impressive financial results, with total revenue reaching $64.7 billion, a 15% increase from the same quarter in the previous year. The gaming division experienced remarkable growth, with revenue rising by 44%, significantly boosted by the Activision Blizzard acquisition. Xbox content and services revenue increased by 61%, indicating strong support from the Activision Blizzard deal.
Microsoft also reported an operating income of $27.9 billion and a net income of $22 billion for the quarter, reflecting year-over-year increases of 15% and 10%, respectively. Notably, the corporation now boasts over 500 million monthly active users across its gaming platforms. Microsoft Corporation (NASDAQ:MSFT) also previewed a record 30 new titles during the quarter that ended June 30, 2024, including anticipated releases like Call of Duty: Black Ops 6 set to launch on Game Pass. This further demonstrates the company’s commitment to expanding its gaming portfolio.
On September 16, 2024, the company announced a quarterly dividend of $0.83 per share, marking a 10% increase from the prior quarter. The board of directors of Microsoft Corporation (NASDAQ:MSFT) also approved a share repurchase program allowing up to $60 billion in buybacks without an expiration date.
Overall, Microsoft Corporation’s (NASDAQ:MSFT) strategic moves in the gaming sector and strong financial performance position it as a compelling esports stock for investors looking to capitalize on the growing gaming market.
According to Insider Monkey’s Q2 database of over 900 hedge funds, 279 hedge funds held stakes in Microsoft Corporation (NASDAQ:MSFT) as of June 30, 2024.
Overall, MSFT ranks first among the 8 best esports stocks to buy according to hedge funds. While we acknowledge the potential of esports 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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