Take-Two Interactive Software Inc (NASDAQ:TTWO), the developer behind the Grand Theft Auto (GTA) franchise, has been added to Wedbush Securities’ Best Ideas list.
The analysts maintained an ‘Outperform’ rating and 12-month price target of $300 on Take-Two, implying upside from current levels of about $225. This represents 30x their fiscal year 2028 EPS estimate of $9.88.
“With a significantly larger GTA VI on the horizon and a structural shift from a hits-driven model to one backed by high-margin recurring revenue, we believe Take-Two warrants a premium to historical ranges,” Wedbush wrote.
Wedbush highlighted what it sees as a fundamental mispricing in recent market weakness, which coincided with a broader pullback in “Generative Gaming” stocks such as Roblox and Unity. “We view Project Genie as a tool, not a competitor, to the specific class of ‘Hyper-Premium’ content Take-Two produces,” they wrote.
They believe that artificial intelligence is unlikely to displace AAA studios like Take-Two, emphasizing the cultural and narrative aspects of its games. “GTA is not just a physics simulator; it is cultural satire. AI models (Genie 3) are excellent at hallucinating ‘dream-like’ visuals but struggle severely with narrative coherence, cultural nuance, and biting satire, the core product of Rockstar,” the analysts wrote. “TTWO sells IP and Culture, which are the hardest things for a foundation model to replicate.”
Wedbush also highlighted the economic limitations of AI-driven game creation. “Running a high-fidelity ‘Neural World Model’ at 4K/60fps requires massive cloud inference costs per user per hour. In contrast, GTA VI offloads 100% of the rendering cost to the consumer’s local hardware,” the analysts wrote, noting that the compute requirements for a fully AI-generated game would be commercially prohibitive.
Looking at Take-Two’s upcoming releases, Wedbush assigned a 75% probability to a November 19, 2026, launch for GTA VI, pointing to strategies to mitigate supply chain bottlenecks.
“While supply chain bottlenecks regarding the physical edition are real, we view them as solvable via a ‘Hybrid Fulfillment’ strategy,” the analysts wrote. They noted, however, that structural risks, including hardware limitations on the Xbox Series S, represented the remaining 25% risk of delay.
Wedbush identified May 2026 as a key decision point for the project. “Historically, Rockstar’s major delays have been communicated roughly six months in advance. We view May 2026 as the critical ‘Go/No-Go’ feasibility window,” the analysts wrote. Passing May without a timeline revision moves the probability of a November launch to 90%, Wedbush added.