Will Sony Group Be a Trillion-Dollar Stock by 2030?

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Sony (NYSE: SONY) is one of the world's top gaming, film production, and music publishing companies. It also sells consumer electronics and image sensors, and it's getting ready to spin off its financial services group over the next few years.

Over the past 10 years, Sony's stock price has risen nearly 430%. But with a market cap of $110 billion, the Japanese conglomerate is still a lot less valuable than Walt Disney, which is worth $176 billion, and its video game rival Microsoft, which has a massive market capitalization of $3.1 trillion. Does Sony's stock have what it takes to rally more than ninefold and turn it into a trillion-dollar stock by the end of the decade?

Two friends play a video game together.
Image source: Getty Images.

Understanding Sony's business

In fiscal 2023 (which ended in March 2024), Sony generated 33% of its net sales from its game and network services (G&NS) division. This segment houses its PlayStation consoles, games, and related services. The entertainment, technology, and services (ET&S) division, which accounted for 19% of its net sales, sells its cameras, personal entertainment devices, home entertainment devices, and other consumer electronics.

Both of these businesses are cyclical. Sony's gaming business is cooling off as we approach the fourth anniversary of the PS5's launch in November 2020. Its ET&S business has been struggling to sell new cameras and other entertainment devices.

The music segment, which houses Sony Music's publishing business, accounted for 12% of its sales last year. The pictures segment, which produces its TV shows and movies, brought in 11% of its sales. These two media businesses are generally unpredictable because they rely heavily on hit albums, shows, and theatrical movies, but it's been offsetting some of that volatility by licensing its content to streaming media platforms.

Sony's imaging and sensing solutions (I&SS) division, which produces image sensors for cameras and phones, generated 12% of its sales. This business usually follows the smartphone market's boom and bust cycles. The rest of Sony's sales mainly came from its financial services business, but it will commence a spinoff of that noncore business next year.

How fast is Sony growing?

From fiscal 2013 to fiscal 2023, Sony's revenue grew at a compound annual growth rate (CAGR) of 5%. Most of that growth was driven by the steady expansion of its G&NS, music, and pictures segments, which offset some wild cyclical swings in its I&SS business and the tepid growth of its ET&S segment.