Nintendo Co shares could extend their record climb beyond the upcoming Switch 2 launch on anticipation of new hit games and other content surrounding the console’s release.
The Mario Kart creator’s focus on success in games, while leveraging its intellectual property into movies and theme parks, makes it look like a safe bet for tech investors amid the volatility sparked by Chinese AI start-up DeepSeek (深度求索), analysts say.
Since the success of The Super Mario Bros Movie in 2023, the market has started “to value Nintendo as a content creator rather than just a hardware manufacturer,” JPMorgan Chase & Co analyst Junko Yamamura said.
Photo: AFP
She expects the stock to continue rising on the company’s “unique” software selling strategy, which includes character merchandise and mobile games.
The stock fell in the wake of the new console announcement two weeks ago on lack of surprise, but has since resumed its rise. The shares are up about 25 percent in the past 12 months, more than double the rise in Japan’s benchmark TOPIX gauge, taking its market value to an all-time high of more than US$87 billion.
While results due on Tuesday will likely show continued weakness on waning demand for the almost eight-year-old Switch, sales of its successor should help drive a revival from the fiscal year starting April, Yamamura wrote in a report earlier this month.
The company has promised more details on its new console in April, but the launch date is yet to be announced. While execution risk remains for the hardware, investor optimism is growing on hopes of new blockbuster software titles from Nintendo and third-party developers, as well as other ways to capitalize on the company’s trove of beloved characters.
“It’s not the Switch 2 itself that’s going to drive earnings,” Wedbush Securities Inc analyst Michael Pachter said. “It’s software sales, Nintendo online subscriptions, movie royalties and the opportunity for theme parks to become something bigger.”
Pachter expects Nintendo to release a new multiplayer game, Mario Kart 9, in tandem with the Switch 2, boosting its shares. Until the console’s official launch, however, the stock might see volatility around leaks on the details, he cautioned.
While sales of the Switch 2 could boost earnings, the console might also expose Nintendo to tariff risks. A high blanket duty on all imports under US President Donald Trump’s administration would hurt the company, said Pachter, who predicts around 40 percent of Switch 2 sales will be in the US.
However, Nintendo’s focus on entertainment content, rather than hardware, provides more shelter from geopolitical tensions compared with some other tech names. Its shares also saw support amid the recent rout in chip stocks on worries tied to DeepSeek.
Companies with strong content offerings are seen as attractive safe havens in tech as the AI boom unfolds, UK-based analyst Pelham Smithers wrote in a note this week. “The DeepSeek scare has sent the AI infrastructure story into a tailspin, leading to a rotation back into videogame stocks” like Nintendo, which does not rely on high-level chips or data centers, he wrote.
Contract chipmaker United Microelectronics Corp (UMC, 聯電) yesterday said it has signed a memorandum of understanding (MOU) with Polar Semiconductor LLC to collaborate on the production of 8-inch wafers in the US. The collaboration aims to strengthen 8-inch wafer manufacturing in the US amid Washington’s efforts to increase onshore manufacturing of semiconductors, contribute to supply chain resilience against shifting geopolitical dynamics, and ensure a secure domestic supply of power semiconductors critical to automotive, electric grids, robotic manufacturing and data centers, the companies said in a joint statement. Under the MOU, Polar and UMC will identify devices for Polar to manufacture at
TECH TITANS: Amazon’s latest chip joins Google in competing for the 90 percent market share held by Nvidia, which claims it is ‘a generation ahead of the industry’ Amazon Web Services (AWS) on Tuesday launched its in-house-built Trainium3 artificial intelligence (AI) chip, marking a significant push to compete with Nvidia Corp in the lucrative market for AI computing power. The move intensifies competition in the AI chip market, where Nvidia dominates with an estimated 80 to 90 percent market share for products used in training large language models that power the likes of ChatGPT. Google last week caused tremors in the industry when it was reported that Facebook-parent Meta Platforms Inc would employ Google AI chips in data centers, signaling new competition for Nvidia. This followed the release last month of
INSULATED: The company said it is less exposed to global complications, as it has built a strong footprint worldwide, and has multiple sources of rare earths and raw minerals Merck Group yesterday said it would ramp up production next year at its new flagship facility in Kaohsiung’s Lujhu District (路竹) to satisfy growing demand for advanced semiconductor materials and specialty gases, and to address supply resilience issues amid mounting geopolitical risks. Merck made the remarks during a news conference before the inauguration of its 500 million euros (US$582.1 million) facility, which is also to supply other markets in the Asia-Pacific region, it said. Merck executive board deputy chair and electronics CEO Kai Beckmann told reporters the company adopted a “local-for-local” strategy about seven years ago to address the cycle time of
Two companies wholly owned by the daughter of the founder of Hon Hai Precision Industry Co (鴻海精密) on Monday reported to the Taiwan Stock Exchange that they would dispose of all of the Hon Hai shares they hold. In filings with the exchange, Hong Wei Investment Co (鋐維) said it would sell the 2.771 million Hon Hai shares it holds and Frontier Investment Corp (承鋒投資) said it would sell its 2.409 million Hon Hai shares from tomorrow until Jan. 3 next year. The two companies are wholly owned and chaired by Shirley Gou (郭曉玲), the eldest daughter of Hon Hai founder Terry
RSS