Learn how to invest in esports today.

Esports, or electronic sports – the emerging field of competitive video gaming – is growing by leaps and bounds, with industry intelligence firms predicting continued momentum in the years ahead. Industry revenues rose from $493 million in 2016 to an expected $1.1 billion in 2019. By 2022, Goldman Sachs predicts revenue will double yet again, reaching $2.96 billion. The top esports stocks will benefit from this bull market, and several companies that may at first glance seem unrelated to the field should also prosper by powering or providing the expensive, ever-improving gaming hardware competitive players love. Here’s a look at seven of the top esports stocks to buy as the industry matures.

Next:Take-Two Interactive Software (ticker: TTWO) Credit

(Chesnot/Getty Images)

Take-Two Interactive Software (ticker: TTWO)

Video game maker Take-Two Interactive is a clear leader in this exciting new field of entertainment. The studio behind the popular NBA 2K franchise of pro basketball games teamed with the NBA to launch the NBA 2K League, the first esports league sanctioned by a pro sports organization. Seventeen of the NBA’s 30 teams launched their own esports teams in 2018’s inaugural season. Four more teams joined for 2019 and online viewership (243 million) is expected to keep rising. TTWO benefits from sales of its NBA 2K video game, plus current and future revenue from its 50% stake in the league, making it one of the top esports stocks today.

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Learn how to invest in esports today.

Esports, or electronic sports – the emerging field of competitive video gaming – is growing by leaps and bounds, with industry intelligence firms predicting continued momentum in the years ahead. Industry revenues rose from $493 million in 2016 to an expected $1.1 billion in 2019. By 2022, Goldman Sachs predicts revenue will double yet again, reaching $2.96 billion. The top esports stocks will benefit from this bull market, and several companies that may at first glance seem unrelated to the field should also prosper by powering or providing the expensive, ever-improving gaming hardware competitive players love. Here’s a look at seven of the top esports stocks to buy as the industry matures.

Take-Two Interactive Software (ticker: TTWO)

Video game maker Take-Two Interactive is a clear leader in this exciting new field of entertainment. The studio behind the popular NBA 2K franchise of pro basketball games teamed with the NBA to launch the NBA 2K League, the first esports league sanctioned by a pro sports organization. Seventeen of the NBA’s 30 teams launched their own esports teams in 2018’s inaugural season. Four more teams joined for 2019 and online viewership (243 million) is expected to keep rising. TTWO benefits from sales of its NBA 2K video game, plus current and future revenue from its 50% stake in the league, making it one of the top esports stocks today.

Nvidia Corp. (NVDA)

Nvidia’s chips, famously used to power innovative, high-growth fields like artificial intelligence and autonomous vehicles, are also widely used for high-performance gaming. The vast majority of competitive gamers use hardware that runs on Nvidia’s top-notch chips, and the semiconductor giant is the go-to hardware provider for most popular esports leagues. The first quarter of fiscal 2020 saw a record number of gaming laptops launched that run on NVDA’s Turing GPUs (graphics processing units); more than 100 such models have been released this year alone. For now, Nvidia’s products remain a prerequisite for serious gamers, making NVDA one of 2019’s top esports stocks.

Activision Blizzard (ATVI)

When it comes to ATVI, there’s good news and bad news. Bad news first: Revenue fell in the first quarter. The good news? The only business segment that did grow was “other,” which includes sales from the Overwatch League – based on the eponymous game – and Major League Gaming, a leading digital platform for live-streaming esports events. Activision, which recently struck a deal with Walt Disney Co. for the House of Mouse to broadcast Overwatch League matches on ESPN, saw “other” segment revenue jump 28 percent last quarter. That segment is still a small percentage of ATVI’s overall revenue (7%), but it’s more meaningful than it was a year ago (5%).

Electronic Arts (EA)

Like Take-Two, EA is one of the blue-chip video game developers, whose core franchises include the FIFA line of video games and the Madden NFL series. Last fiscal year, more than 45 million unique players signed in to play FIFA 19 and FIFA 18 alone. Arguably more importantly, EA is developing a streaming competitive video game platform, which will allow gamers to compete worldwide on all sorts of devices – as long as they’re subscribers, of course. The company plans to offer its hit games on the service, in addition to third-party games – positioning it a little like the Netflix (NFLX) of competitive gaming.

NetEase (NTES)

Geographically speaking, North America is where you’ll find most of the top esports stocks headquartered, and with the most players, viewers and revenue opportunities, that makes sense. But Asia, and particularly China, is quickly developing a large appetite for esports too; that’s where Chinese online entertainment leader NetEase comes in. Online gaming revenue rose from 8.76 billion Chinese yuan in the first quarter of 2018 ($127.1 billion) to 11.85 billion yuan in the first quarter of 2019. NetEase’s self-developed massively multiplayer online role-playing games (highlighted by its Westward Journey franchise) are widely popular in China, and through a partnership with Activision Blizzard, NTES provides Chinese versions of games like World of Warcraft, Overwatch, Diablo and StarCraft.

Logitech (LOGI)

Now for a refreshing change of pace from the content side of esports: Logitech, a company strictly focused on electronics hardware. Like Nvidia, many of Logitech’s products are must-haves for competitive gamers, who rely heavily on the newest, fastest, most reliable gear to stay at the top of their e-game. Fiscal 2019 was LOGI’s sixth consecutive of growing revenue and 2020 looks to be the seventh. Niche products include gaming mice, keyboards, streaming gear, headsets, virtual flight controllers and racing wheels. Gaming segment revenue rose 32% last quarter and is now the largest by revenue. LOGI goes for a forward price-earnings ratio of 17 and pays a 1.8% dividend.

Tencent Holdings (TCEHY)

Chinese tech giant Tencent boasts a dazzling diversity of impressive technology businesses, with tentacles in social media, entertainment and e-commerce. TCEHY is one of the top esports stocks to buy because it's the world’s biggest gaming company. Leveraging part or full ownership of hit games like Clash of Clans, Fortnite and League of Legends, Tencent owns the League of Legends Pro League and operates the LoL World Championships and competitive Fortnite tournaments. Media rights and sponsorship revenue totaled $130 million in the first half of 2019 – likely a drop in the bucket compared to what the company will be hauling in a decade from now.

Top esports stocks for investors.

Take-Two Interactive Software (TTWO)Nvidia Corp. (NVDA)Activision Blizzard (ATVI)Electronic Arts (EA)NetEase (NTES)Logitech (LOGI)Tencent Holdings (TCEHY)1 of 10Updated on July 10, 2019: This article was first published May 16, 2017, and has been updated with new information.

John Divine, Staff Writer

John Divine is a senior investing reporter for U.S. News & World Report, where he’s been ...  Read more

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