Move over America, these Asian stocks are shaping up in big ways.
Sony, Nintendo, and Tencent are among the corporations that have competed to influence the Western stock market. With rising globalization, more Asian companies could gain a foothold in a market previously dominated by the West.
The advantage of these corporations is that they can expand their operations into Western countries. For instance, Sony has various locations in Europe, Australia, New Zealand, and the United States. Nintendo and Tencent also boast international headquarters in the US, Canada, France, Germany, and Oceania.
3 Asian Stocks to Round Out a Portfolio
A growing number of American industries are being outsourced and shut down. As a result, potential investors may shift their interests towards those of other high-performing countries such as Japan and China.
Despite some global uncertainties since the 2020 COVID-19 pandemic, these three Asian stocks have performed mostly well compared to some of their Western counterparts.
Sony Group Corp.
Sony Group Corporation has consistently proven to be a strong buy for consumers interested in electronic products. From Dec. 2023 to Feb. 2024, Sony averaged daily closes in the $90s, thanks to growing music sales, games, pictures, and sensors.
The Japanese multinational media and electronics company has profoundly impacted consumerism through its various expansions and acquisitions.
For instance, the long-awaited PlayStation 5 (PS5) has succeeded despite initial worldwide shortages, selling 50 million units internationally by December 9, 2023.
In February, the corporation’s quarterly profit “totaled 363.9 billion yen, or $2.4 billion, up from 321.5 billion yen the year before.”
Sony stock closed 2023 at $94.69. Although the company’s buying value started decreasing in the latter half of February, it is still considered a strong buy as of March 2024, with the company being the fourth largest gaming stock by market cap during that same month.
Nintendo
Nintendo has consistently been one of the highest-priced gaming stocks by market cap compared to the other big-league companies. This can be attributed to the Japanese multinational video game company’s “conservative approach” within the hardware industry, with consoles and games accounting for over 90% of group sales.
Nintendo had a strong run in 2023, with its share price rising roughly 24% in FY23.
With changing times and strong competition from their console rivals, Nintendo hopes to gain further momentum by releasing more movies.
For instance, “global ticket sales from The Super Mario Bros Movie hit $1.4 billion.” Considering that the Mario franchise is Nintendo’s best-selling franchise with over 800 million sold and the best-selling video game franchise of all time, it should come as no surprise that the film was successful at the box office.
Nintendo’s console sales remain strong, and with a new Mario film planned for 2026, the company seems to have enough room to experiment with its financial ventures in the foreseeable future.
Tencent
The Chinese multinational technology company has proven to be a force to be reckoned with. Known for being among the largest gaming stocks in the world, Tencent could even become a major competitor to the Magnificent Seven stocks.
Tencent delivered solid returns in 2023 and has all the room to grow further in 2024.
Growing from its foundation as a small messaging service, Tencent became “a conglomerate with business interests spanning multiple industries including social networking, gaming, entertainment, fintech, cloud computing, and more.”
Tencent’s empire is centered around the success of WeChat, a popular Chinese social media application with a 1.3 billion user base. WeChat’s domination in China is shown in online services such as communication, banking/booking, accessing transportation, gaming, and e-commerce. Most Chinese citizens use WeChat daily for communication, thus providing Tencent with much of the company’s advertisement revenue.
Tencent has a stake in leading tech companies, including fellow Eastern e-commerce companies such as Pinduoduo and Sea Ltd. The multinational corporation also had minority stakes in Western companies, including Tesla, Snapchat, and Spotify. These holdings allow Tencent to become worthy on the international financial stage.
Although there are some signs of potential, some investors are shying away from Tencent despite the company exceeding revenue of 554.6 billion yuan ($77 billion) and net profit of 115.6 billion yuan ($16 billion) in 2022.
This is mostly due to major cultural and political tensions between the U.S. and China. Some investors are uncomfortable investing in Chinese stocks, regardless of their global financial standing.
While Tencent has shown great promise as a leading tech company in China, its valuation is still far from the Magnificent Seven stocks. For more risky investors, however, Tencent’s stock could be all the more rewarding for its price point.
Why Does All of This Matter to Stock Buyers
If trends are anything to go by, these three Asian companies could continue to offer their products and services to Americans.
That said, America’s uneasy economy and a greater reliance on outsourced goods could lead to a bias toward these high performers. This information may ruffle some feathers, but it is possible that these influential Eastern stocks could even become formidable opponents to the Magnificent Seven in the near future.
The only thing stopping these rising stocks from entertaining this possibility is their home countries’ cultural and political differences.
However, this could become less of an issue with increasing globalization throughout the East and West. Most American consumers can simply pull up stocks on their smartphones, giving them the time to easily discover other international and Asian stocks.
