Sony Group Corporation SONY announced a strategic capital and business tie-up with KADOKAWA CORPORATION ("KADOKAWA"), aimed at transforming the global entertainment landscape. The agreement includes a third-party allotment by KADOKAWA to Sony, scheduled for Jan. 7, 2025, where Sony will acquire 12,054,100 new KADOKAWA shares for nearly ¥50 billion. With this acquisition, Sony is set to become KADOKAWA’s largest shareholder, holding around 10% of its shares, including those acquired in February 2021.

Sony and KADOKAWA, with collaborations on multiple projects earlier, aim to deepen their partnership through this capital and business alliance. The idea is to enhance the global value of their IP portfolios, explore joint investments in content, discover new talent together, and promote diverse media mixes for their IPs, fostering broader and more impactful collaboration.

Going forward, both companies are likely to explore specific collaborative initiatives, including adapting KADOKAWA's IP into live-action films and TV dramas for global audiences, co-producing anime, leveraging the Sony Group to expand the global distribution of KADOKAWA's anime, broadening the publishing reach of KADOKAWA's games and fostering talent to advance and grow virtual production capabilities.

Sony Corporation Price and Consensus

Sony Corporation price-consensus-chart | Sony Corporation Quote

Sony’s continuous innovation in the Game & Network Services (GN&S), Music, Entertainment, Technology & Services and Imaging & Sensing Solutions (I&SS) segments serves as major driving forces. The G&NS unit is gaining from favorable forex impact, higher sales from network services (PlayStation Plus) and rising sales of non-first-party titles. 

With a digital-stream surge, Sony’s Music division is gaining healthy momentum. Driven by soaring revenues from live events, merchandising and licensing in Recorded Music and rising streaming revenues in Recorded Music and Music Publishing, the Music business is expected to witness higher sales in each quarter of 2025. The favorable impact of forex rates further cushions its success.

The growing subscriber base of Crunchyroll and robust sales of image sensors for mobile devices are driving growth in Sony's Pictures and I&SS segments. In addition, Sony has been actively acquiring companies to enhance its portfolio and advance its long-term objectives.

SONY’s Zacks Rank & Stock Price Performance

SONY currently carries a Zacks Rank #2 (Buy). Shares of the company have gained 11.9% in the past year compared with the sub-industry's growth of 9.4%.

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Other Stocks to Consider

Some other top-ranked stocks from the broader technology space are InterDigital, Inc. IDCC, Ubiquiti Inc. UI and Qualcomm Incorporated QCOM. IDCC & UI presently sport a Zacks Rank #1 (Strong Buy) each, while QCOM carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

IDCC is a pioneer in advanced mobile technologies that enable wireless communications and capabilities. The company engages in designing and developing a wide range of advanced technology solutions, which are used in digital cellular as well as wireless 3G, 4G and IEEE 802-related products and networks. It has a long-term growth expectation of 17.44%.

Ubiquiti’s effective management of its strong global network of more than 100 distributors and master resellers improved its visibility for future demand and inventory management techniques. In the last reported quarter, Ubiquiti delivered an earnings surprise of 20.9%. Its highly flexible global business model remains apt to adapt to the changing market dynamics to overcome challenges while maximizing growth.

Qualcomm is well-positioned to meet its long-term revenue targets driven by solid 5G traction, greater visibility and a diversified revenue stream. It is increasingly focusing on the seamless transition from a wireless communications firm for the mobile industry to a connected processor company for the intelligent edge.

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