We recently published a list of 11 Best Consumer Electronics Stocks to Invest in Now. In this article, we are going to take a look at where Sony Group Corporation (NYSE:SONY)) stands against other best consumer electronics stocks to invest in now.
The global consumer electronics market has seen significant growth, reaching a valuation of $755 billion in 2024, with projections to hit $1.15 trillion by 2031, according to Research and Markets. This growth is driven by rising demand for innovative devices that enhance convenience. Consumer electronics, including smartphones, tablets, smartwatches, and connected home devices, have transformed how people live, work, and connect.
Continuous innovation also keeps the industry competitive, with companies focused on attracting consumer interest. Despite global economic challenges, the market remains resilient, driven by advancements in AI. In 2023, smartphone shipments reached about 1.2 billion units, reinforcing this category’s profitability. The market is projected to grow to $1.13 trillion by 2025, with a 3% annual growth rate. North America, particularly the US, is at the forefront of the consumer electronics market, leading globally in terms of adoption and demand. The region is expected to maintain this leadership due to its swift embrace of cutting-edge technologies. In the US, the fast-paced lifestyle increasingly revolves around digital solutions, with automation becoming a key priority.
Tim Seymour, Seymour Asset Management CIO, appeared on CNBC’s ‘The Exchange’ on January 18 to signify upcoming events and how they might correlate with current market dynamics. Seymour notes that the tech sector, which includes consumer electronics, has rallied under President Trump, creating a favorable hiring environment. He believes that at least half of the MAG7 stocks have defensible valuations. Regarding tariffs, he suggests that consumer-centered sectors, like consumer electronics, will be impacted first, with reports indicating that tariffs could negatively affect the economy, as highlighted by the World Bank and IMF.
Discussing the economic implications of tariffs, Seymour expressed skepticism about tax increases while acknowledging uncertainty around reductions. He reflected on the tariffs imposed against China in 2018 and 2019, which impacted manufacturing, including consumer electronics. While tariffs may hinder growth, he noted that a strong dollar could enhance the competitiveness of US products abroad. Seymour focused on tech companies with solid valuations for their growth potential. Large MNCs in consumer electronics may perform better with upcoming announcements and are less vulnerable to strategic influences than smaller firms. While he is cautious about growth scares overshadowing inflationary pressures in 2025, he maintains a positive sentiment overall.
Methodology
We first sifted through ETFs, online rankings, and internet lists to compile a list of the top consumer electronics stocks. We then selected the 11 stocks that were the most popular among elite hedge funds and that analysts were bullish on. The stocks are ranked in ascending order of the number of hedge funds that have stakes in them, as of Q3 2024. The hedge fund data was sourced from Insider Monkey’s database which tracks the moves of over 900 elite money managers.
Why are we interested in the stocks that hedge funds pile into? 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 team of content creators using the latest devices and software to produce high-quality animation and motion pictures.
Sony Group Corporation (NYSE:SONY)
Number of Hedge Fund Holders: 21
Sony Group Corporation (NYSE:SONY) is a global leader in consumer electronics, entertainment, and technology. It’s known for its innovative products, such as televisions, cameras, audio systems, and gaming consoles like PlayStation. It also produces and distributes a range of entertainment content, from movies and music to video games and streaming services.
The company’s recent alliance with KADOKAWA CORPORATION made it the largest shareholder in KADOKAWA with an acquisition of 12,054,100 shares, which represents ~10% ownership. It’s a major Japanese media conglomerate involved in publishing, film, gaming, animation, and digital media. This alliance aims to use both companies’ strengths to maximize the global value of intellectual property. They plan to collaborate on adapting KADOKAWA’s IP into various media formats and expand global content distribution.
On January 8, Morgan Stanley named Sony Group Corp. (NYSE:SONY) its top pick in consumer electronics and Japan semiconductors, raising its price target to ¥4,000 from ¥3,400. This was fueled by the company’s sustained growth, particularly in its games and network services segment. This comes from its user base of over 110 million players, its appeal to game developers, and its evolving business model. By effectively using player data and AI to enhance user engagement, PlayStation has increased software and service sales while improving efficiency and reducing costs.
Aristotle International Equity Strategy highlighted the company’s strong fourth-quarter performance. This was driven by PlayStation’s robust network effects, Crunchyroll’s expanding reach, and the growing demand for the company’s image sensors. The firm stated the following regarding Sony Group Corporation (NYSE:SONY) in its Q4 2024 investor letter:
“Sony Group Corporation (NYSE:SONY), the global provider of videogames and consoles, image sensors, music, and movies, was a top contributor for the period. The company reported strong results driven by third-party gaming revenue and record PlayStation 5 console profitability. This was achieved despite lower console sales, which, in our view, exemplifies the strength of PlayStation’s network effects. PlayStation is the world’s largest gaming platform with 116 million monthly active users, making it an attractive market for game developers and allowing users to play the most advanced games at lower costs than PCs. In its Pictures segment, Crunchyroll (the anime business Sony acquired from AT&T in 2020) signed a distribution agreement with YouTube Primetime Channels, the market share leader in streaming services, which we believe will increase Crunchyroll’s subscriber base. Though a singular example, it illustrates management’s ability to better execute and further improve the segment’s profitability, a catalyst we previously identified. In addition, Sony reported improved sales of image sensors for mobile products as the global smartphone market continued its gradual recovery. Sony’s image sensor business has the largest global market share, and we believe, longer term, it is uniquely positioned to benefit from increasing demand for both autonomous driving technology in vehicles and improved image quality in smartphone cameras. As such, we continue to admire Sony’s capacity to build on its industry leadership and optimize its operations, which includes its plan for a partial spinoff of its Financial Services segment in October 2025.”
Overall, SONY ranks 4th on our list of best consumer electronics stocks to invest in now. As we acknowledge the growth potential of SONY, our conviction lies in the belief that AI stocks hold great promise for delivering high returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than SONY 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.
