Sony (NYSE:SONY) Group's shares soared to a historic closing high, fueled by optimism surrounding its gaming division and other entertainment ventures.
The stock concluded the trading session on Tuesday with a 4.1% gain, reaching 3,338 yen and eclipsing the previous peak achieved during the dot-com bubble's zenith in 2000.
The company's stock has seen a marked increase lately, following the announcement of robust quarterly results for the period ending in September. The performance was notably bolstered by profit growth in its gaming sector.
On Tuesday, an assessment by Macquarie adjusted its operating profit forecast for Sony's forthcoming fiscal year, which begins in April. The revision was partially credited to the anticipated higher earnings from game titles produced by Sony's in-house studios.
Over the past several years, Sony has invested billions to enhance its content creation capabilities in entertainment. The entertainment divisions, encompassing gaming, music, and film, accounted for nearly 60% of the total revenue in the most recent fiscal year, a significant rise from approximately 30% a decade ago.
In line with its strategy to concentrate on core entertainment sectors, Sony intends to separate its insurance and online banking division and pursue a public listing for the unit in 2025.
During the dot-com bubble's surge over twenty years ago, Sony's shares momentarily hit Y3,390 and attained a closing high of Y3,260. On Tuesday, the shares briefly reached Y3,343.
In the previous month, Sony disclosed a 69% surge in quarterly net profit, amounting to 338.50 billion yen, or about $2.24 billion, with the gaming segment contributing significantly to this increase. The operating profit of the gaming business more than doubled, driven by elevated software and network services sales and improved hardware profitability.
Looking ahead, Sony has updated its revenue projections for the fiscal year ending in March 2025, with expectations for higher gaming revenue.
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