GameStop (GME) shares rallied nearly 8% on Wednesday after the gaming merchandise retailer posted a surprise profit for its second financial quarter.
GME recorded a 22% year-over-year increase in revenue for its fiscal Q2 to roughly $972 million, driven mostly by strong demand for hardware and collectibles.
Despite today’s rally, GameStop stock is down well over 25% versus its year-to-date high set in May.
Do GameStop Earnings Warrant Buying GME stock?
GME earnings report serves as a major boost to investor confidence as it reflects the company’s strategic push into video games’ exclusive editions and collectibles is proving more than just a marketing gimmick.
The quarterly release confirms GameStop’s evolving hybrid retail strategy – blending digital and physical experiences – is resonating well with consumers, fueling hopes of successful turnaround.
For investors, the success of GameStop’s partnerships with videogame publishers over exclusive merchandise signals a viable growth path, which could trigger further gains in GME stock.
Meanwhile, GameStop retains about $8.7 billion in cash, offering adequate leeway to double down on these strategic pivots in pursuit of long-term, sustainable growth, which makes the meme stock even more attractive to own in 2025.
Can GME’s Bitcoin Strategy Help GameStop Shares Recover?
GameStop’s improving financials are particularly significant as they may enable the management to accelerate its recently launched Bitcoin (BTCUSD) treasury strategy that’s already proving constructive for the NYSE-listed firm.
GME spent about $500 million to load up on 4,710 BTC in May. As of writing, those holdings are worth nearly $529 million, reflecting a tad below 6% unrealized gain within 4 months.
Simply put, the world’s largest crypto by market cap has added meaningful upside to GameStop’s balance sheet. For investors, this adds a speculative but potentially rewarding dimension to GME shares’ turnaround story.
Note that globally renowned experts like Tom Lee remain convinced that Bitcoin will hit $200,00 by the end of 2025.
Wall Street Remains Bearish on GameStop
Despite the aforementioned positives, GameStop stock has so far failed to woe Wall Street firms.
As of this writing, only two analysts cover GME shares, and even they have a “Sell” rating on them, tied to a $13.50 mean target indicating potential downside of over 45% from here.
