- In the wake of recent volatility in the AI sector, particularly following the launch of DeepSeek’s AI model, investors are turning to Nintendo (OTC:NTDOY) as a safer investment option
- The uncertainty surrounding AI stocks has made Nintendo’s stable focus on gaming and intellectual property particularly attractive
- Tokyo Securities raised its rating on Nintendo stock from buy to strong buy and increased its first-year sales forecast for the Switch 2 from 14 million units to 16 million units
- Nintendo stock (OTC:NTDOY) last traded at US$16.37
In the wake of recent volatility in the AI sector, particularly following the launch of DeepSeek’s AI model, investors are turning to Nintendo (OTC:NTDOY) as a safer investment option.
The uncertainty surrounding AI stocks has made Nintendo’s stable focus on gaming and intellectual property particularly attractive.
Nintendo’s stock on the rise
According to a recent article by Cryptopolitan, Nintendo’s stock has been pushing higher lately after an analyst shared an upbeat sales forecast for its upcoming Switch 2 console. Initial reactions to the Switch 2 were mixed, but those views have changed considerably as more details have emerged. Analysts now believe that the Switch 2, along with Nintendo’s dedication to gaming as its core strength, makes the stock a safe option for those worried about the volatility in the AI sector.
Sales growth and revenue trends
Nintendo’s sales growth has been on a decline in recent years, with revenue gradually decreasing from ¥1.76 trillion in 2021 to ¥1.67 trillion in 2024. However, this trend is starting to change as gamers eagerly anticipate the release of the Nintendo Switch 2. The recent volatility caused by DeepSeek’s AI model launch has made Nintendo’s stocks especially attractive while the dust settles on the AI charts.
Analysts’ bullish sentiments
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 work in its favor in projections of earnings growth sustainability.
The company’s expansion into movies and theme parks, leveraging its well-known characters and franchises, is expected to provide additional revenue streams and reduce its reliance on the gaming sector alone.
The Switch 2
Nintendo debuted what it defined as a next-generation Switch platform in a short trailer video released earlier this month. The company’s stock surged immediately after the reveal, but subsequent bearish commentary prompted a pullback. Even so, bullish sentiments are taking hold again as investors and analysts warm back up to the prospects for the recently unveiled Switch 2 console. Believed to go on sale sometime later this year, the Switch 2 builds on the successful concept of its predecessor with upgraded graphics performance and features.
Some gamers initially appeared disappointed that the company failed to share more details about the new gaming system and the perceived underwhelming upgrade on its predecessor. However, in a recently published note, Tokyo Securities raised its rating on Nintendo stock from buy to strong buy and increased its first-year sales forecast for the Switch 2 from 14 million units to 16 million units. The original Switch is a global success story with more than 143 million sales worldwide.
We can expect more details about the Switch 2 on April 2nd. Since the platform is scheduled to release later this year, there’s a high probability that Nintendo will provide a look at the system’s lineup for its launch window and offer some pricing information. The original Switch is considered one of the most successful gaming systems ever, so its heir has not just big shoes, but Kuribo’s shoes to fill. The bullish predictions for Nintendo stocks are not entirely based on this new hardware generation matching the prior one in sales. If the Switch 2 sells 100 million units in its lifecycle, it will still be a big success for Nintendo. The company’s lineup of gaming franchises, strong software output, and potential earnings diversification opportunities are also expected to help push the stock higher over the long term.
Get ready for adventure and remarkable feats
With headquarters in Kyoto, Japan Nintendo Co., Ltd. is a multinational video game company that develops, publishes and releases video games and video game consoles.
Nintendo stock (OTC:NTDOY) last traded at US$16.37 on the OTC Pink market, where it climbed 3.15 per cent last week. Its stock has risen 14.42 per cent since last year.
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