Nintendo: Churning Recovery (Ticker: NTDOY)

The video game giant has begun to rebound.

Next three weeks at Emerging Moats: The Real Brokerage (quarterly update), Wise (Introductory Research Report), Grandstand Limited (formerly Gambling.com Group, Quarterly Update)

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It took years of patience for the Nintendo thesis to materialize. Rumors of an updated Switch hardware had been simmering from 2021 to 2025, but it was finally announced in January and launched in June of last year to much fanfare, with millions of units sold in the first week. Over 23 million units have been sold in the first 12 months after launch. Shares of the stock rose quickly in anticipation, with the US ADR going from under $15 to over $25 in the first half of 2025.

Then, around this time last year, only two months(!) after Switch 2 hardware began shipping, the stock peaked and entered a violent drawdown, going from $25 to a low of $10.50.

It was one of the most painful experiences I have had as an investor. There was a combination of “sell the news” timing, underwhelming game announcements in the first year of the hardware cycle, and Nintendo becoming an anti-AI infrastructure bet because of its reliance on memory chips that were rising in price and experiencing dwindling supply. The Yen’s continued slide did not help. I am guessing that from August 2025 through the Spring of 2026, many investors gave up on Nintendo stock entirely.

I still own shares. In fact, as of this writing, Nintendo is the largest position in the Emerging Moats portfolio.

In this Friday update, I will cover:

• Slow playing software launches and memory chip update

• Modeling mature earnings power

• Is there still an emerging moat?

• My investment decision + valuation

• Portfolio update and short positions

Slow playing launches and memory chip update

From my seat, there are two reasons Nintendo’s stock is in the gutter. If these get resolved, the earnings inflection will accelerate, and the stock will hit a new all-time high.