Nintendo shares have lost more than 40% over the past year. With Switch 2 sales slowing and holiday shopping approaching, investors are watching whether a new Zelda blockbuster can revive the companys fortunes.
The latest earnings report offered little reassurance for Nintendos US-listed shares (NTDOY). Switch 2 sales plunged 41% year-over-year.
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Operating profit fell 16% to ¥73.9 billion, missing analysts expectations.
Nintendo (NTDOY) Stock Price. Source: TradingViewWhy the Holiday Season Could Change Nintendos Outlook
Nintendo has kept its annual target of 16.5 million Switch 2 sales unchanged. However, it sold just 6.49 million consoles during the first six months, leaving another 10 million to sell before March 2027.
Its biggest holiday weapon arrived on November 5: The Legend of Zelda: Ocarina of Time.
The critically acclaimed remake is already attracting attention, including a reported infinite-jump glitch that could interest speedrunners.
More importantly, Nintendo President Shuntaro Furukawa described the games launch as a “very strong start.” Citi analysts believe Zelda could drive holiday console purchases.
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“Given these growth drivers, we believe the shares will recover following a temporary correction,” the bank wrote.
Analysts Maintain a Buy Rating on Nintendo Stock, Hold a 24% Upside Target. Source: Investing.comWhat Should Nintendo Stock Investors Watch Next？
The biggest concern is profitability.
Nintendo raised Switch 2s US price to $499.99 in September. Rising memory-chip costs continue to pressure margins, although management says another immediate increase is not planned.
There are encouraging signs. Switch 2 software sales rose 18.8% during the first half, suggesting existing owners are still spending on games.
For investors, three developments will determine whether Nintendos recovery gains momentum:
- Holiday demand: Can Zelda attract enough new Switch 2 buyers？
- Profit margins: Can Nintendo absorb rising manufacturing costs？
- Annual targets:Can the company deliver the remaining 10 million console sales？
The Christmas quarter will provide the first major test. Strong holiday sales could support Citi‘s recovery thesis. Another disappointing quarter would put Nintendo’s ambitious annual forecast under greater scrutiny.