Nintendo Stock Is Up 41% This Year. It Is Still Cheap (Ticker: NTDOY)
Investors keep underestimating the profit potential of the Switch 2
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For our 2025 bold bets, I predicted that Nintendo’s ADR would hit $30 this year. It began the year at around $15.
My conviction on this bet has only grown with the official launch of the Switch 2. At $21, Nintendo stock remains dirt cheap, and I plan to hold on to my shares through at least the $30 mark.
Shortages of the hardware have already begun to occur at retailers even though Nintendo prepared well in advance to flood the market with inventory, 2.2 million people entered the lottery to purchase a Switch 2 on launch day, and secondary market sales are already pushing $850:
This may be the biggest hardware launch in gaming history.
Combined with the higher price point — $450 for the hardware, $500 for hardware + Mario Kart World, $525 for hardware + Mario Kart World + Nintendo Switch Online — Nintendo’s revenue is going to explode higher through the rest of the year.
Some math to show why. Globally, the average selling price for the Switch 2 will be lower than the $450 price point in the United States. However, we need to add the average attach rate of game purchases, software subscriptions, and other costs for playing the Nintendo Switch such as pro controllers.
In total, each Switch 2 purchase may be worth $600 in total revenue for Nintendo this fiscal year.
I believe the company can sell 25 million units (if they have the stock) through the end of this fiscal year in March. 25 million multiplied by $600 is $15 billion in revenue.
Nintendo’s conservative guidance calls for 15 million units sold and $13 billion in total revenue for the company. Total revenue includes sales from the original Switch and licensing/IP/theme parks.
Yeah, I think $20 billion in revenue this year is doable, if not probable.
If that happens, the stock goes to $30.
I remain a patient shareholder.
-Brett