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Why Roblox (RBLX) Is One of the Best Video Game Stocks to Buy Now

We recently published a list of the 10 Best Video Game Stocks to Buy Now. In this article, we are going to take a look at where Roblox Corporation (NYSE:RBLX) stands against the other best video game stocks to buy now.

Overview of the Gaming Industry

The video game industry boomed between 2019 and 2021 due to the social distancing effects of the COVID-19 pandemic, which forced people to find new entertainment platforms. According to the US International Trade Administration, there were around 2.7 billion gamers worldwide in 2020, and around 75% of all US households had at least one gamer.

According to Grand View Research, the global video game market was estimated to be around $217.06 billion in 2022 and is expected to grow at a compound annual growth rate (CAGR) of 13.4% between 2023 and 2030. The growth of this market is attributed to the emergence of high bandwidth network connectivity, the ongoing trend of online gaming, and the continuing demand for 3D gaming.

Furthermore, a continual upsurge in the penetration of smartphones is making video games more accessible, social, and portable. The development of more powerful and technologically advanced smartphones has further supported the ongoing expansion of the video game industry. To support this momentum, key market players are developing advanced gaming services and products to expand the customer base, which is having positive overall effects on the industry.

According to the “United States Gaming: Market Share Analysis, Industry Trends & Statistics, Growth Forecasts 2019-2029” report released by ResearchAndMarket, a study by ESA found that the US had over 227 million video game players in 2024. Around 80% of the players were over 18 years of age, while 76% of American children under 18 were players. 74% of households had at least one video game player. During the pandemic, 71% of parents agreed that video games proved to be a much-needed break for their children. Similarly, 66% of parents believed that the transition to distance learning was made easier and more accessible by video games.

READ ALSO: 12 Best Education Stocks to Buy in 2025 and 10 Best Vaccine Stocks to Buy According to Hedge Funds.

Mobile Gaming to Dominate the Market

Smartphones have become a primary medium in the video gaming industry. According to the report, 57% of individuals used smartphones to play games in 2024. 42% used personal computers, while 46% employed consoles. In addition, 29% spent around 1 to 3 hours per week on the activity, while 77% spent more than 3 hours a week. 51% of individuals spent more than 7 hours playing video games in the US in 2024.

Experts anticipate the mobile gaming segment to continue dominating the market in the future as the most favored form of gaming in the US, surpassing both PC gaming and console gaming. The growing demand for mobile gaming stems from a number of technological improvements and advancements, including AR, VR, 5G, and cloud gaming. Other dominant trends in the market include the rise of the hyper-casual game genre.

Our Methodology

We sifted through stock screeners, online rankings, and ETFs to compile a list of 20 video game stocks. We then selected the top 10 most popular stocks among elite hedge funds as of Q4 2024. We sourced the hedge fund sentiment data from Insider Monkey’s database. The list is sorted in ascending order of hedge fund sentiment.

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 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).

A person taking lessons through Roblox Education, expanding their knowledge and skills.

Roblox Corporation (NYSE:RBLX)

Number of Hedge Fund Holders: 61

Roblox Corporation (NYSE:RBLX) provides online gaming services. Its platform comprises Roblox Client, Roblox Studio, and Roblox Cloud. Roblox Studio is an app that allows users to explore digital 3D worlds, while Roblox Studio is a toolset used by creators and developers to publish, build, and operate 3D experiences and other content. Roblox Cloud encompasses the infrastructure and services powering human co-experience platforms.

The company reported 32% year-over-year revenue growth in fiscal Q4 2024, reaching $988 million and surpassing analyst estimates of $960 million. Its bookings also grew 21% year-on-year to $1.362 billion, surpassing the top end of its guidance. Japan and India make up two very large markets for the company, and drove over 50% year-over-year growth. Daily Active Users (DAUs) for the company rose 18% year-over-year to 85.3 million in fiscal Q4 2024.

Roblox Corporation (NYSE:RBLX) is also expanding the range of the ages on its platform. Over 61% of its total DAUs fall in the over 13 category, which saw a 26% year-on-year growth. All these trends reflect the company’s growing popularity. Roblox Corporation (NYSE:RBLX) is also investing in its virtual economy, app performance, and AI-powered discovery and safety to enhance the user experience.

In Q4 2024, the company fully launched Roblox Assistant to allow conversational creation within Roblox Studio. Roblox Corporation (NYSE:RBLX) expanded its platform availability by launching on PlayStation, and it is continually looking to introduce its platform to new audiences. All of these initiatives are aimed at driving higher engagement to help the platform grow, bringing a positive light to the company.

Overall, RBLX ranks 5th on our list of the best video game stocks to buy now. While we acknowledge the potential of RBLX 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 RBLX but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

READ NEXT: 20 Best AI Stocks To Buy Now and Complete List of 59 AI Companies Under $2 Billion in Market Cap

Disclosure: None. This article is originally published at Insider Monkey.

AI Fire Sale: Insider Monkey’s #1 AI Stock Pick Is On A Steep Discount

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Trump’s $500B AI Investment: One Small Cap Stock With Big Potential in 2025

President Trump just announced a massive $500 billion investment into project “Stargate”, a joint venture between OpenAI, SoftBank, and Oracle to build artificial intelligence infrastructure within the United States over the next four years. (1)  The AI frenzy is in full swing, but beneath the surface lays one critical piece with a massive opportunity for investors reading this now: Copper.

What does Trump’s $500B investment into AI infrastructure have to do with copper one may ask? Every AI data center requires 60,000 pounds of copper – equivalent to 30 tons … With 100-150 grams of copper per Nividia H100, This represents a 4-6x increase over traditional data centers.

Analysts at Goldman Sachs predict “AI will add 1 million metric tons of annual copper demand by 2030”. (2) Compounding on top of the already crippling Copper Deficit, AI Data Centres are set to add another 1 Million tons to the projected 10 million ton supply deficit looming in 2030. With no major new copper mines being developed, and one of the world’s largest copper mines recently going out of production (First Quantum’s Cobre Panama mine) (3), BHP has warned of a “critically constrained” market. Bloomberg analysts forecast that copper prices could exceed $12,000 per ton as shortages intensify (4).

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