Take-Two stock holds steady as Jefferies reiterates buy rating

Take-Two Interactive (NASDAQ:TTWO), trading near its 52-week high of $240.78, maintained its position Wednesday after Jefferies reiterated its buy rating and $270.00 price target on the video game publisher’s stock. The company’s shares have surged nearly 49% over the past year, though InvestingPro analysis indicates the stock may be trading above its Fair Value.

Jefferies noted that artificial intelligence is not yet making a significant impact on Take-Two’s games, though the company expects AI to deliver productivity and efficiency improvements over time. Take-Two management does not believe AI will substantially reduce game development costs, as technological advancements historically raise quality standards and require increased investment. Despite operating with moderate debt levels, the company maintains a robust gross profit margin of 58%.

The company dismissed the notion that AI would enable startups to independently create top-quality games, suggesting any AI-driven development advantages would likely be quickly adopted industry-wide and become part of consumer expectations.

Take-Two expressed satisfaction with the return on investment from its acquisition of FiveM, a user-generated content platform for Grand Theft Auto. The company clarified that the upcoming GTA VI will be primarily an entertainment product rather than a pure user-generated content platform.

Management indicated no plans to shut down the existing GTA V Online in the near future, suggesting both games could coexist as GTA VI gains traction, with user-generated content serving as an addition to GTA VI Online rather than replacing it entirely.

In other recent news, Take-Two Interactive has revised its outlook to stable from negative, as reported by S&P Global Ratings. This adjustment follows the company’s issuance of $1.19 billion in equity, aimed at reducing its debt and supporting general corporate purposes. The company plans to use these proceeds to address $1.15 billion of debt maturing within the next 12 months. Additionally, Take-Two has announced a public offering of 4,750,000 shares at $225 each, with potential additional shares available to underwriters. The proceeds from this offering are also intended for general corporate purposes, including debt repayment and possible acquisitions.

Goldman Sachs recently raised its price target for Take-Two to $255, maintaining a Buy rating, citing strong performance in recent titles and a positive outlook on future releases. The much-anticipated release of Grand Theft Auto VI in May 2026 is expected to significantly contribute to revenue growth. Take-Two’s pipeline includes other major titles like Mafia and Borderlands, which are anticipated to bolster the company’s financial position. The company’s management remains optimistic about consumer activity levels and spending habits, reinforcing confidence in their strategic direction.

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