2 best gaming actions to watch in November

0

The Great Recession of 2008-2009 is now a distant memory, almost forgotten for most investors, while those new to investing have only benefited from a massive bull market (if you ignore the temporary plunge in the last year at the start of the pandemic).

Growth values were their own force of nature on Wall Street, as the Federal Reserve’s easy money policies, low borrowing rates, and government spending programs created an opportunity for businesses to grow organically through innovation as well as acquisition. There is no indication that anything will change in the near future.

Image source: Getty Images.

The actions of games played an important role in this. Over the past decade, people like Activision, Electronic arts, and Take-Two Interactive have largely surpassed the S&P 500.

Yet video games have changed dramatically during this period, as games have moved online and into digital formats, and the industry has been gamified with the growth of esports.

As the general market index continues to hit new highs, there are new opportunities for profit. The following two gaming actions are set to set the tone for future wins.

Video game players applaud.

Image source: Getty Images.

Corsair game

Manufacturer of gaming equipment and accessories Corsair game (NASDAQ: CRSR) has been on a roller coaster ride for the past two years. But with its stock down 27% this year and nearly 50% below its 52 week high, it is ready to go.

Corsair manufactures high-end, high-performance headsets, keyboards, mice, controllers and equipment for live gamers and content creators. While the pandemic has actually benefited Corsair as people have been forced to stay at home and have turned to video games for entertainment, the current disruption in the supply chain has taken a toll on his business.

Revenue fell 14% in the third quarter, but Wall Street expects Corsair to generate nearly $ 1.9 billion for the full year, which is expected to exceed $ 3 billion. dollars by 2025.

Data from Juniper Research suggests global esports revenue is expected to reach $ 1.1 billion this year and could reach $ 3.5 billion by the middle of the decade, while the live gameplay audience could attract more than a billion viewers in the world.

Corsair’s inventory of green screens, ambient lighting, sound deadening panels and its Cam Link Pro PCIe capture card and video mixer gives content creators all the high-quality tools they need, and the company is preparing for the future of the industry.

With less than 1.5 times the sales, 15 times next year’s profits, and less than 20 times the free cash flow it generates, Corsair Gaming could be set up for future earnings.

Smiling video game player.

Image source: Getty Images.

Nvidia

Even if Nvidia (NASDAQ: NVDA) takes advantage of the tremendous expansion underway in artificial intelligence, data centers and automobiles using its computer chips to generate new sales and market share gains – data centers are set to become Nvidia’s largest segment by 2025 – the game is still its bread and butter.

Arguably best known for its graphics cards that make processing-intensive video games possible, Nvidia’s gaming segment has generated $ 10.5 billion in revenue in the past four quarters, or 48% of the business. of the company.

Graphics processing units (GPUs) for games generated 47% of total revenue for the second quarter of the fiscal year, and Mordor Intelligence reports that the gaming GPU market, in which NVIDIA has an 83% market share, is expected to grow at an annual compound rate of 14% until 2026.

With the increased adoption of cloud-based games, NVIDIA is also growing with its GeForce now cloud gaming service, which presents a particularly attractive catalyst for further growth.

Nvidia uses the Deep Learning Super Sampling (DLSS) technology it developed to make games even better and more immersive. DLSS takes low resolution images and scales them to high resolutions for display on high resolution screens through the application of AI.

Wall Street predicts the chipmaker will increase revenue from $ 16.5 billion in 2021 to $ 51 billion in 2026, a compound annual growth rate of over 25%. Gains should grow even faster, over 26% per year to $ 7.73 per share.

It is true that Nvidia does not come cheap, but as a dominant leader in its core market and expanding into new verticals with spectacular growth opportunities in new revenues and profits, it will become the premium it presents. and its stock will increase accordingly.

10 stocks we like better than Nvidia
When our award-winning team of analysts have stock advice, it can pay off to listen. After all, the newsletter they’ve been running for over a decade, Motley Fool Equity Advisor, has tripled the market. *

They have just revealed what they believe to be the ten best stocks that investors are buying now … and Nvidia was not one of them! That’s right – they think these 10 stocks are even better buys.

See the 10 actions

* The portfolio advisor returns on October 20, 2021

Rich Duprey has no position in any of the stocks mentioned. The Motley Fool owns stock and recommends Activision Blizzard, Nvidia, and Take-Two Interactive. The Motley Fool recommends Electronic Arts and the following options: January 2023 long calls for $ 115 on Take-Two Interactive. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


Source link

Share.

Leave A Reply