Ricardo Pillai
2 min read
In This Article:
We came across a bullish thesis on Take-Two Interactive Software, Inc. (TTWO) on Substack by SuperJoost. In this article, we will summarize the bulls’ thesis on TTWO. Take-Two Interactive Software, Inc. (TTWO)'s share was trading at $237.50 as of May 20th. TTWO’s forward P/E 77.52 according to Yahoo Finance.
A computer technician working on a video game console with a gaming headset.
Take-Two Interactive is entering a transformative period with strong momentum, driven not by its flagship Grand Theft Auto franchise but by NBA 2K, which has evolved into a year-round engagement engine. By shifting from a one-size-fits-all approach to a cohort-driven model, NBA 2K saw an 80% year-over-year increase in average sessions per player, leading to a 42% surge in in-game spending and a 7% uptick in full-game unit sales. This personalization strategy helped boost overall recurrent consumer spending by 14% YoY. Mobile gaming also delivered a surprise upside with 3% growth, outperforming expectations despite margin pressure from rising development costs. Games like Dragon City and Two Dots continue to overdeliver in this segment.
While fiscal 2026 guidance came in below consensus, largely due to what analysts consider overly cautious expectations for upcoming releases like Borderlands and Mafia, management is emphasizing stability over hype. Historically, both franchises have posted strong launches—Borderlands 3 sold 5 million units in five days—yet are being downplayed in projections. Instead, leadership is urging investors to focus on FY27, when the highly anticipated release of GTA 6 is expected to redefine the company's earnings power. CEO Strauss Zelnick, in a recent interview, noted Rockstar’s continued delivery of content through GTA Online expansions, effectively releasing new GTA experiences multiple times a year. As the company leans into tailored engagement and live operations, it’s building a more durable revenue base. Take-Two's innovation in personalized distribution and engagement not only supports current performance but sets the stage for a transformative FY27.
Take-Two Interactive Software, Inc. (TTWO) is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 67 hedge fund portfolios held TTWO at the end of the fourth quarter which was 46 in the previous quarter. While we acknowledge the risk and potential of TTWO as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than TTWO but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
