Source: korobskyph / Shutterstock.com
The cloud gaming market is expected to witness significant growth through 2024. This is driven by technological advancements, increased internet penetration, and the widespread adoption of 5G. The global cloud gaming market is expected to grow from approximately $1.72 billion in 2023 to approximately $28.91 billion by 2032. This reflects a compound annual growth rate (CAGR) of 36.8%. This background forms my article on the best cloud gaming stocks to buy.
Companies are leveraging their extensive infrastructure and technological capabilities to deliver high-quality gaming experiences. These companies are focusing on strategic partnerships and innovations to expand their market position.
The United States and China are key markets for cloud gaming, driven by robust internet infrastructure, a large gaming community, and extensive 5G deployments. The Asia Pacific region in particular is expected to see significant growth, driven by increasing smartphone penetration and the availability of affordable high-speed internet.
So here are three of the best cloud gaming stocks for investors to consider
Nvidia (NVDA)
Source: Poetra.RH / Shutterstock.com
Nvidia (NASDAQ:NVDA) is a leader in GPU technology. It offers the GeForce NOW cloud gaming service. This service provides high-quality gaming experiences across devices.
The reason I’m optimistic about NVDA is because of the potential expansion of a partnership between Microsoft (NASDAQ:MSFT) and NVIDIA. Now, the GeForce NOW cloud gaming service could be integrated with Xbox Game Pass. Images of the Xbox PC app show titles labeled “Included with NVIDIA GeForce NOW.” This suggests that Game Pass subscribers could be given access to play compatible titles via the cloud using GeForce NOW. They would do this in lieu of using Xbox Cloud Gaming.
If the partnership goes further and GeForce NOW integrates with Game Pass on Xbox Series X|S consoles, it would be a major development in cloud gaming.
In addition, the company’s revenue and earnings per share (EPS) is expected to grow significantly in the coming years. In 2024, the average revenue forecast is $122.88 billion. This is an increase of 101.70% from the previous year’s revenue of $60.92 billion. Meanwhile, Nvidia’s earnings per share are expected to increase by 131.52% in 2024, from $1.19 in the previous year.
Microsoft (MSFT)
Source: VDB Photos / Shutterstock.com
Microsoft’s (NASDAQ:MSFT) Xbox Cloud Gaming, part of the Xbox Game Pass Ultimate subscription, leverages its extensive gaming library and Azure cloud infrastructure to deliver a robust cloud gaming experience.
Aside from speculation about MSFT’s deepening partnership with NVDA, Microsoft has expanded its cloud gaming service to Xbox Series X, Series S, and Xbox One consoles. The move allowed gamers to play over 100 titles with their Xbox Game Pass Ultimate subscription. They could do so on these consoles via the cloud, even before installing them.
The company’s decision to combine cloud gaming with its Xbox Game Pass Ultimate service at no additional cost strengthened its competitive position in the market.
Alphabet (GOOG, GOOGL)
Source: IgorGolovniov / Shutterstock.com
The alphabet (NASDAQ:GOOGLNASDAQ:GOOG) Despite the demise of services like Google Stadia, Alphabet remains a powerful force in cloud gaming. This is largely due to the dominance of its mobile app store. As the proliferation of 5G and then 6G takes precedence, cloud gaming on mobile will continue to grow. Companies like Alphabet will be at the center of this trend.
Alphabet recently announced its financial results for the first quarter of 2024. The company reported a 15% year-over-year increase in total revenue to $80.54 billion. The company’s revenue was driven by strong performance in its Google services. YouTube advertising revenue increased 21% year-over-year to $8.09 billion. Google search sales increased 14% to $46.16 billion. Finally, Google Cloud sales increased 28% to $9.57 billion.
In addition to the positive financial results, Alphabet also announced its first-ever dividend of $0.20 per share and a share buyback worth up to $70 billion. The company’s CEO Sundar Pichai attributed the strong performance to Google’s leadership in AI research and infrastructure, as well as its global product reach, making it one of the best cloud gaming stocks to consider going forward.
The responsible issuer had no positions (either directly or indirectly) in the securities mentioned in this article on the date of publication.
On the date of publication, Matthew Farley had no positions (either directly or indirectly) in any securities mentioned in this article. The opinions expressed are the author’s own and are subject to the Publishing Guidelines for InvestorPlace.com.
Matthew began writing coverage of the financial markets during the crypto boom of 2017 and has also been a team member of several fintech startups. He then began writing about Australian and US equities for various publications. His work has appeared in MarketBeat, FXStreet, Cryptoslate, Seeking Alpha and New Scientist magazine, among others.
