Weak earnings expectations do not deter bullish views on Take-Two Interactive Software (TTWO.US)! Investors are betting that the blockbuster game "GTA 6" will usher in a new growth cycle.

Take-Two Interactive Software (TTWO.US) shares rose nearly 13% last week, marking their best weekly performance in nearly five months. Investors are adjusting their positions ahead of the gaming company's fiscal second-quarter earnings report due after the bell on Monday. Take-Two Interactive Software's upcoming fiscal second-quarter report may show a decline in results. Wall Street currently expects Take-Two Interactive Software's fiscal second-quarter revenue to fall 16% year-over-year to US$1.66 billion, with adjusted earnings per share down 33% year-over-year to US$0.97. At the same time, however, investors expect Take-Two Interactive Software to disclose more details about "Grand Theft Auto 6" (GTA 6) ahead of its November 19 release. The company may even disclose pre-order data for what is one of the most anticipated games in recent years. Its predecessor, "GTA 5," is one of the best-selling video games of all time, with more than 230 million copies sold since its 2013 launch. In August, Take-Two Interactive Software said it had observed "unprecedented" levels of demand for "GTA 6," though it did not adjust its fiscal 2027 bookings guidance at the time, keeping it at US$8 billion to US$8.2 billion. At the time, Take-Two Interactive Software expected fiscal second-quarter bookings of between US$1.62 billion and US$1.67 billion, below market expectations. This suggests the company's business continues to face weak pressure due to a lack of new game releases outside the "GTA" series. Last week, Macquarie initiated coverage of Take-Two Interactive Software with an "Outperform" rating and a US$300 price target. The investment research firm said that with the launch of "GTA 6," Take-Two Interactive Software is entering a multi-year phase of accelerating free cash flow generation. On the other hand, investment bank BTIG cut its price target on Take-Two Interactive Software to US$262 from US$313 to reflect weaker mobile gaming data. The bank also lowered its forecasts for the "NBA 2K" series. On the Stocktwits platform, retail investor sentiment toward Take-Two Interactive Software is "bullish." One user said: "Take-Two Interactive Software has fallen 17.7% since its last earnings report, while management called pre-order demand for 'GTA 6' unprecedented." Another user said: "'GTA 6' launches November 19, and fiscal 2027 net bookings guidance of US$8 billion to US$8.2 billion implies about 20% growth. Operating cash flow is expected to exceed US$1 billion. Buying at this price ahead of the biggest game launch in industry history." Another user wrote: "Unless Strauss Zelnick (Take-Two Interactive Software's CEO) discloses pre-order data, the stock will likely fall. But either way, I think the stock will recover within a day or two and hit a 52-week high before the game launches."