Take-Two Interactive Software's Recent Sell-off Misprices Near-Term Risk, Wedbush Says

MT Newswires Live00:11

Take-Two Interactive Software's (TTWO) sell-off on Friday, alongside other "generative gaming" companies like Roblox (RBLX) and Unity Software (U), fundamentally misprices its near-term risk, Wedbush analysts said in a Monday note.

The market fears that artificial intelligence could potentially render AAA video game studios obsolete, but that view misunderstands why people buy Rockstar games, analysts said.

Wedbush said that while AI models like Genie 3 are excellent at hallucinating "dream-like" visuals, they struggle with narrative coherence, cultural nuance, and biting satire, which are the core products of Rockstar games.

Analysts noted that intellectual property and "culture" are the hardest things for a foundation model to replicate, arguing instead that the threat is more tangible for the company's mobile segment.

Wedbush said there is a 75% probability that GTA VI will be launched on the currently announced date of Nov. 19.

Analysts have an outperform rating on the stock and a $300 price target.

Shares of the company were up over 3% in recent Monday trading.

Price: 227.79, Change: +7.48, Percent Change: +3.40

Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

Comments

We need your insight to fill this gap
Leave a comment