Can Take-Two Interactive Stock Beat the Market?

Take-Two Interactive Software (NASDAQ: TTWO) stock has been under pressure recently. The video game publisher, which is known for franchises including Grand Theft Auto (GTA), Red Dead Redemption, and NBA 2K, has seen pullbacks in conjunction with valuation contractions across the broader software industry. The stock also saw big pullbacks on news that the release of Grand Theft Auto VI had been delayed to November of this year and Alphabet's unveiling of a new artificial intelligence (AI) tools for video game and 3D content creation.

Take-Two stock has slid 17% across 2026's trading and is down 19% from the valuation peak it hit last year. As of this writing, the company's share price has climbed just 15% over the last five years. Meanwhile, the S&P 500 is up 80.5% across the stretch, and the Nasdaq Composite has risen 72%. Can the gaming publisher beat the market over the next five years, or is it on track to continue being an underperformer?

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2026 is set to be a make-or-break year for Take-Two

After a series of delays, the long-awaited Grand Theft Auto VI is now seemingly locked in for a Nov. 19 release date. While strong performance for the game is already priced in to the stock, the title will almost certainly be a massive hit.

Grand Theft Auto V, which initially released in 2013, currently stands as the most profitable entertainment release. The game has shipped more than 225 million copies worldwide and generated billions in revenue from in-game purchases connected to the game's online multiplayer mode. Matching GTA V's performance would be no small feat, but Grand Theft Auto VI will almost certainly kick off a robust new growth phase for Take-Two.

Like its predecessor, Grand Theft Auto VI has been designed to have a very long product life cycle. In addition to launching on Microsoft's Xbox Series S and Series X consoles and Sony's PlayStation 5 platforms, the title will almost certainly see updated releases on new consoles from these companies, as well as PC. It also wouldn't be shocking to see a version of the game released for Nintendo platforms.

While performance for the overall video game industry has been somewhat sluggish recently, the stage appears to be set for Grand Theft Auto VI to dominate the market and deliver big wins for Take-Two. The industry hasn't seen a triple-A release on this scale since GTA V more than a decade ago, and softening of the competitive landscape should play to the blockbuster sequel's advantage.

The rise of AI-generated content raises some interesting questions about the future of engagement trends across the gaming industry, but Take-Two's ability to offer ultra-premium offerings at a scale that no other company is replicating suggests the company should be able to thrive despite some shifts in entertainment creation tools and consumption habits. The publisher should also benefit from AI tools making game development cheaper and more efficient. With that in mind, I like the stock's chances of beating the market over the next five years.

Keith Noonan has positions in Take-Two Interactive Software. The Motley Fool has positions in and recommends Microsoft and Take-Two Interactive Software. The Motley Fool recommends Nintendo. The Motley Fool has a disclosure policy.