Analysts pitch Nintendo stocks as safety net against uncertain AI stocks future
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Stocks of Japanese video gaming giant Nintendo are being pitched as a safety net for investors to limit exposure to AI stocks, which have experienced particularly high volatility in recent days thanks to recent developments. Nintendo’s stock has been on the uptick after an analyst shared an upbeat sales forecast for its Switch 2 console. Initial reactions to the Switch 2 were mixed, but those views have changed considerably. Analysts believe that the upcoming Switch 2 and Nintendo’s dedication to its core strength — gaming — make the company’s stocks a safe option for investors worried about the volatility in the AI sector right now. AI sector volatility pushing interest in Nintendo Stocks Nintendo’s sales growth has been on a decline in recent years. Its revenue gradually declined from 1.76 trillion JPY in 2021 to 1.67 trillion JPY in 2024 (the fiscal year ends in March). However, that is starting to change as gamers expect the release of the Nintendo Switch 2. Volatility caused by the recent launch of DeepSeek’s AI model has made the company’s stocks especially attractive while the dust settles on the AI charts. Analysts are now pitching Nintendo stocks as a stable investment option due to the company’s strong focus on gaming and intellectual property, which are less volatile compared to the uncertain future of AI stocks. Nintendo’s past success with popular games like Mario Kart and the anticipated release of the Switch 2 console also works in its favor in projections of earnings growth sustainability. The company’s expansion into movies and theme parks, which leverages its well-known characters and franchises, is also expected to provide additional revenue streams and reduce its reliance on the gaming sector alone. Nintendo’s upcoming Switch 2 console Nintendo debuted what it defined as a next-generation Switch platform in a short…
Filed under: News - @ January 31, 2025 8:26 am