Parents beware. Christmas came early in 2025 as Nintendo Co., Ltd. (OTCMKTS: NTDOY) released its hotly anticipated Switch 2 handheld gaming console. It comes with a hefty price tag of $449.00.
[content-module:CompanyOverview|OTCMKTS:NTDOY]However, investors who bought NTDOY stock earlier this year may easily have enough profits to cover the premium price. The stock is up 43% in 2025 and is trading near its all-time high.
A run-up like that leads to concerns that there’s not much upside left. Events like the Switch 2 launch can be a “sell the news” event. NTDOY stock is up just 1.3% in a volatile week of trading since the Switch 2 launch.
However, analysts give NTDOY stock a consensus price target of $25.60, which would be a 22% upside from the stock’s closing price on June 10. What do investors need to know about the opportunity in Nintendo stock?
Nintendo Is Affirming Its Premium Position
By many accounts, Nintendo saved the video game industry in the mid-1980s. At that time, the company established itself as offering premium value, and it’s never deviated from that.
Nintendo is well-known for prioritizing software development. The company has a long-standing policy of limiting the number of games its developers can make, so the focus is on quality rather than quantity. From 2019 through 2023, about 80% of the company’s software revenue came from its first-party games.
In fact, it’s never had a gaming console priced higher than $300. Even at $450, the Switch 2 is priced less than the Sony PlayStation of 20 years ago. Consumers have had to wait for the Switch update for eight years, so they may accept that price hike.
However, the price of video games made for the Switch is also increasing. Mario Kart, the signature game for the device, will be $80. That’s significantly higher than the previous $60 price point from the prior version. Some analysts believe that tariffs played a role.
Nintendo is denying the claims, and there’s some evidence that on an inflation-adjusted basis, the new pricing is still very favorable. However, the launch is coming at a time when many consumers are stretched and stressed.
An Outlier in a Weak Sector
Consumer discretionary stocks continue to be hit or miss for investors. The Consumer Discretionary Select Sector SPDR Fund (NYSEARCA: XLY) is down about 3% in 2025. Some of the top holdings in the fund including Tesla Inc. (NASDAQ: TSLA), Lululemon Athletica Inc. (NASDAQ: LULU), and more recently McDonald’s Corp. (NYSE: MCD) have been among the market laggards.
This was supposed to be a great year for these stocks. The expectation was that inflation and interest rates would come down, and consumers would take care of the rest.
But during the first half of 2025, that forecast hasn’t materialized yet. The rate of inflation has decreased, but not enough to prompt the Federal Reserve to take action. Additionally, the potential impact of tariffs is holding consumer sentiment back.
[content-module:TradingView|OTCMKTS:NTDOY]Fundamentals Are Bearish, But Technicals Suggest Bullish Momentum
A price-to-earnings (P/E) ratio of around 46x puts Nintendo above its historical averages. The same is true of the stock’s price-to-sales (P/S) ratio and its price-to-book (P/B) ratio.
Nevertheless, its most recent earnings report in May didn’t include any of the benefits from the Switch 2 launch. It’s fair to say that some of that is priced into the stock already.
The bottom line is that if the company doesn’t meet its goals for the Switch 2 launch, there could be significant value compression. But in the near term, the NTDOY stock chart looks slightly bullish.
After moving to an all-time high, the stock is finding resistance, which is just shy of $21. However, the moving average convergence divergence (MACD) has been swinging from bullish to bearish and appears to be ready to swing bullish again.
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