A significant analyst upgrade is pushing back against recent market concerns that artificial intelligence could disrupt the gaming industry, specifically targeting Take-Two Interactive Software. Raymond James strengthened its recommendation on the video game publisher’s shares, arguing that the sell-off driven by AI anxiety has been overdone.
Strong Quarterly Performance Underscores Bullish Case
The positive stance from Raymond James is supported by Take-Two’s latest financial results. For the third quarter of fiscal 2026, the company reported net bookings of $1.76 billion. This figure surpassed market expectations of $1.58 billion and represented a year-over-year increase of 28%.
Management credited the performance to the ongoing strength of core franchises including NBA 2K, robust mobile game revenue, and sustained player engagement in GTA Online. Consequently, the company raised its full-year fiscal 2026 net bookings forecast, setting a new midpoint guidance of $6.7 billion.
Raymond James Counters the AI Narrative
On Tuesday, Raymond James upgraded its rating on Take-Two from “Outperform” to “Strong Buy.” The firm maintained its price target of $285 per share. This move directly challenges the market’s negative reaction to advancements in generative AI for game development, which was sparked by the unveiling of Google’s “Project Genie.”
The analysts contend that AI world-building models are more likely to serve as a complementary tool for developers rather than a replacement for established game engines. They argue the technology cannot replicate the core creative elements that make games enjoyable, nor can it manage the complex mechanics of user acquisition, distribution, and monetization.
Should investors sell immediately? Or is it worth buying Take-Two?
Broad Analyst Support Amidst Ongoing Volatility
The Raymond James upgrade joins a chorus of bullish analyst opinions:
– Wells Fargo increased its price target to $301
– BMO Capital Markets raised its target to $280 (from $275)
– UBS maintains a $300 target and a “Buy” rating
– DA Davidson also holds a $300 target with a “Buy” rating
According to data compiled by MarketBeat, the consensus includes 17 “Buy” ratings and two “Strong Buy” ratings. The average price target among analysts stands at approximately $284.
Despite this support, the stock has experienced notable volatility. Shares traded around $203.27 on Wednesday, a significant decline from levels above $250 in late January—a drop of roughly 15%. The 52-week trading range for the stock is $188.56 to $264.79.
DA Davidson added further context to the AI debate, noting that generative AI models operate probabilistically, which may not align with the deterministic requirements of many core video game development processes.
The Grand Theft Auto VI Catalyst
Looking ahead, investor focus remains firmly on Take-Two’s confirmed launch plan for Grand Theft Auto VI in November 2026. During the Q3 earnings call, management suggested that the title’s release could establish a new financial foundation for the business and pave the way for enhanced profitability in fiscal 2027.
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