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.
Semiconductor business between Taiwan and the US is a “win-win” model for both sides given the high level of complementarity, the government said yesterday responding to tariff threats from US President Donald Trump. Home to the world’s largest contract chipmaker, Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), Taiwan is a key link in the global technology supply chain for companies such as Apple Inc and Nvidia Corp. Trump said on Monday he plans to impose tariffs on imported chips, pharmaceuticals and steel in an effort to get the producers to make them in the US. “Taiwan and the US semiconductor and other technology industries
SMALL AND EFFICIENT: The Chinese AI app’s initial success has spurred worries in the US that its tech giants’ massive AI spending needs re-evaluation, a market strategist said Chinese artificial intelligence (AI) start-up DeepSeek’s (深度求索) eponymous AI assistant rocketed to the top of Apple Inc’s iPhone download charts, stirring doubts in Silicon Valley about the strength of the US’ technological dominance. The app’s underlying AI model is widely seen as competitive with OpenAI and Meta Platforms Inc’s latest. Its claim that it cost much less to train and develop triggered share moves across Asia’s supply chain. Chinese tech firms linked to DeepSeek, such as Iflytek Co (科大訊飛), surged yesterday, while chipmaking tool makers like Advantest Corp slumped on the potential threat to demand for Nvidia Corp’s AI accelerators. US stock
The US Federal Reserve is expected to announce a pause in rate cuts on Wednesday, as policymakers look to continue tackling inflation under close and vocal scrutiny from US President Donald Trump. The Fed cut its key lending rate by a full percentage point in the final four months of last year and indicated it would move more cautiously going forward amid an uptick in inflation away from its long-term target of 2 percent. “I think they will do nothing, and I think they should do nothing,” Federal Reserve Bank of St Louis former president Jim Bullard said. “I think the
SUBSIDIES: The nominee for commerce secretary indicated the Trump administration wants to put its stamp on the plan, but not unravel it entirely US President Donald Trump’s pick to lead the agency in charge of a US$52 billion semiconductor subsidy program declined to give it unqualified support, raising questions about the disbursement of funds to companies like Intel Corp and Taiwan Semiconductor Manufacturing Co (台積電). “I can’t say that I can honor something I haven’t read,” Howard Lutnick, Trump’s nominee for commerce secretary, said of the binding CHIPS and Science Act awards in a confirmation hearing on Wednesday. “To the extent monies have been disbursed, I would commit to rigorously enforcing documents that have been signed by those companies to make sure we get
RSS