We recently compiled a list of the 8 Best Esports Stocks to Buy According to Hedge Funds. In this article, we are going to take a look at where Bilibili Inc. (NASDAQ:BILI) stands against the other esports stocks.
The Future of Esports: Emerging Trends and Market Potential
The esports sector is experiencing significant growth and transformation, driven by evolving trends and increased investment. According to The Business Research Company, the global esports market was valued at $1.63 billion in 2023. Looking forward, the market is expected to grow at a compound annual growth rate (CAGR) of 16.4% during 2024-2028 to reach $3.48 billion by the end of the forecast period.
Technological advancements continue to shape the future of esports. The integration of generative AI in gaming is creating more immersive experiences, while cloud gaming continues to gain traction. As these technologies evolve, they are expected to enhance player engagement and expand the esports audience.
Another key trend is the rise of live streaming. This also offers exciting avenues for both content creators and advertisers looking to connect with a dynamic audience. Comscore’s 2024 State of Gaming Report revealed that gamers spent 45 billion hours on online video content in 2023.
Esports and live streaming are gaining traction, particularly among younger generations. The report shows that about 86% of Gen Z and 80% of Millennials who are aware of esports have watched it. Additionally, 53% of Gen Z and 61% of Millennials have engaged with live streaming. The report also highlights that 79% of viewers prefer watching esports with others. This indicates the social nature of esports.
The rise of platforms like Twitch and YouTube Gaming has made esports more accessible, further fueling interest and participation.
Additionally, the Middle East is emerging as a significant market for esports, thanks to initiatives like Saudi Arabia’s Vision 2030, which aims to diversify the country’s economy. Major events, such as the Esports World Cup held in Riyadh, have drawn thousands of participants and substantial prize pools, showcasing the region’s potential. Here’s a short excerpt from our previous article “7 Best Gaming Stocks To Buy Now” that discusses this in more detail:
“In July and August, the first-ever Esports World Cup took place in Riyadh, Saudi Arabia, attracting over 1,500 players and offering a massive prize pool of $60 million. The event spanned eight weeks and included 23 competitions across 22 different video games, such as Call of Duty and Fortnite.”
Overall, the esports sector is poised for continued growth. As organizations adapt to new market dynamics and leverage innovative technologies, the future looks promising for investors interested in this vibrant industry.
Methodology
To compile our list of the 8 best esports stocks to buy according to hedge funds, we used the Finviz and Yahoo stock screeners to find the largest gaming and esports companies. We also reviewed our own rankings and consulted various online resources. We carefully verified our list to remove any companies that can not be classified as esports stocks. Next, from an initial pool of more than 20 esports stocks, we focused on the top 8 stocks most favored by institutional investors. Data for the hedge fund sentiment surrounding each stock was taken from Insider Monkey’s database of 912 elite hedge funds. The 8 best esports stocks to buy are ranked in ascending order based on the number of hedge funds holding stakes in them as of Q2 2024.
Why do we care about what hedge funds do? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
A group of millennials playing an online game on their mobile devices.
Bilibili Inc. (NASDAQ:BILI)
Number of Hedge Fund Holders: 25
Bilibili Inc. (NASDAQ:BILI) is a Chinese online entertainment company that offers a wide range of digital content, including videos, games, and live streaming services. The company allows users to interact with streamers and gamers, creating an engaging community experience. It also owns Bilibili Gaming (BLG), a professional esports organization that competes in popular games like League of Legends and Overwatch. Bilibili Inc. (NASDAQ:BILI) has a diversified business model. It primarily generates revenue from mobile games, value-added services, advertising, and e-commerce.
The company is focused on attracting high-quality content creators to enhance its platform, which has led to impressive growth in user engagement. In the second quarter of 2024, Bilibili Inc. (NASDAQ:BILI) reported that average daily video views increased by 18% year-over-year, reaching over 4.8 billion. The company’s total revenues rose by 16%, driven primarily by a 30% increase in advertising revenue and growth in its games and value-added services.
The strong performance in advertising and gaming has significantly boosted Bilibili’s gross profit, which increased by 49% year-over-year. Bilibili Inc. (NASDAQ:BILI) is successfully engaging its community. In the second quarter, average daily active users (DAUs) were 102.3 million, up 6% year-over-year. Bilibili’s DAUs spent an average of 99 minutes on the platform in Q2 2024, up from 94 minutes in Q2 2023.
As one of the best esports stocks to buy, Bilibili Inc. (NASDAQ:BILI) has managed to grow its revenue at a compound annual growth rate (CAGR) of 15% over the past three years.
These factors make Bilibili Inc. (NASDAQ:BILI) a compelling investment opportunity in the esports sector. As of the second quarter of 2024, Bilibili Inc. (NASDAQ:BILI) was held by 25 hedge funds, according to Insider Monkey’s database.
Overall BILI ranks 8th among the best esports stocks to buy according to hedge funds. While we acknowledge the potential of BILI as an investment, 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 BILI but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
