Video gaming has evolved far beyond a niche group of gamers sitting at home playing alone on their consoles. Online gaming, streaming and esports have become part of a booming gaming industry. The global esports market is expected to grow 5.5% annually to reach $5.9 billion by 2029, according to Statista.
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Esports revenue includes media rights, ticket sales, sponsorship and advertising deals, but the entire gaming industry benefits from esports popularity. Bank of America analysts recommend these seven top stocks to buy with high exposure to the esports arena:
Stock | Upside Potential as of Jan. 28 Close |
Nvidia Corp. (ticker: NVDA) | 47.2% |
Microsoft Corp. (MSFT) | 14.0% |
Sea Ltd. (SE) | 12.1% |
NetEase Inc. (NTES) | 17.9% |
Roblox Corp. (RBLX) | 2.2% |
Take-Two Interactive Software Inc. (TTWO) | 6.8% |
Unity Software Inc. (U) | 29.0% |
Nvidia Corp. (NVDA)
Nvidia’s high-end graphics cards and other hardware provide the high-performance experience esports gaming professionals demand. Analyst Vivek Arya says Nvidia is his top semiconductor stock pick due to the company’s leadership position in several key growth markets, including high-end gaming, cloud services, accelerated computing, artificial intelligence and advanced automotive. Arya says Nvidia will play a key role in converting $1 trillion in legacy infrastructure into accelerated systems in the coming years. In addition to its growth outlook, Nvidia has also maintained a healthy balance sheet. Bank of America has a “buy” rating and $190 price target for NVDA stock, which closed at $128.99 on Jan. 28.
Microsoft Corp. (MSFT)
Microsoft’s legacy gaming business includes its Xbox console and Game Pass subscription service. However, Microsoft made a big splash in gaming in 2023 when it acquired Activision Blizzard, one of the world’s largest video game publishers. Activision Blizzard launched the professional Overwatch League in 2018 and the Call of Duty League in 2020. Its esports division also includes Hearthstone Masters and Grandmasters, World of Warcraft Mythic Dungeon International and Arena World Championships. Analyst Brad Sills says gaming and cloud services will create significant value for Microsoft. Bank of America has a “buy” rating and $510 price target for MSFT stock, which closed at $447.20 on Jan. 28.
Sea Ltd. (SE)
Sea is a Singapore-based company that has divisions focused on gaming, e-commerce and financial technology. Its Garena gaming business develops mobile and PC games and hosts esports events around the world. Garena claims its Free Fire World Series 2021 Singapore event was watched by 5.4 million concurrent viewers, which it says was the highest viewership of any esports event in history. Analyst Sachin Salgaonkar says Sea’s Shopee e-commerce platform is well positioned to benefit from an online retail boom in southeast Asia, and Brazil is also an attractive growth market. Bank of America has a “buy” rating and $134 price target for SE stock, which closed at $119.53 on Jan. 28.
NetEase Inc. (NTES)
NetEase is a Chinese company that provides online PC gaming, mobile gaming and online education services. It also operates other businesses, including music, e-commerce, video streaming, email and payment services. The NetEase Esports X Tournaments are among the largest events for competitive gaming. Analyst Lei Zhang says NetEase will likely continue to generate solid revenues from its self-developed, high-margin core games, and the company has opportunities to expand further into mobile gaming. Zhang says NetEases’s Marvel Rivals, released in December, has been a big success. Bank of America has a “buy” rating and $122 price target for NTES stock, which closed at $103.42 on Jan. 28.
Roblox Corp. (RBLX)
Roblox is a company with a platform that allows users to make their own games, interact virtually and play in real time over the internet. These digital worlds are collectively called the metaverse, which could ultimately take esports to the next level. Analyst Omar Dessouky says many “would be” PC and console video game developers will transition to Roblox in the next several years, driven in part by Roblox’s attractive, younger user base and by a funding and talent crunch in the legacy console gaming industry. Bank of America has a “buy” rating and $70 price target for RBLX stock, which closed at $68.43 on Jan. 28.
Take-Two Interactive Software Inc. (TTWO)
Take-Two Interactive Software is a video game publisher and owner of popular franchises including Grand Theft Auto, Red Dead Redemption and Borderlands. In 2017, Take-Two partnered with the National Basketball Association to create the NBA 2K League for esports competition. However, last year, Take-Two announced a “bold new vision” for the NBA 2K League as a “global digital entertainment business.” Dessouky says concerns about the future of NBA 2K are unwarranted, and he anticipates a Grand Theft Auto 6 release in the second half of 2025. Bank of America has a “buy” rating and $200 price target for TTWO stock, which closed at $187.14 on Jan. 28.
Unity Software Inc. (U)
Unity Software provides a software platform for users to develop, operate and monetize video games and other 3D content, particularly virtual reality and augmented reality content. As esports evolves over time, Unity may play an important role in the transition of high-level gaming competition, from 2D screens to 3D VR. Analyst Michael Funk says Unity has the world’s leading mobile game creation engine, and monetization of that engine should improve over time. Funk says revenue growth and monetization efforts will likely dictate Unity’s potential upside. Bank of America has a “buy” rating and $30 price target for U stock, which closed at $23.25 on Jan. 28.
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7 Best Esports Stocks to Buy originally appeared on usnews.com
Update 01/29/25: This story was published at an earlier date and has been updated with new information.