TLDR
- Nintendo stock closed down 8.4% in Tokyo to 7,020 yen, its lowest since August 2024
- Switch 2 price raised by up to 20% in key markets due to soaring memory chip costs driven by AI demand
- Nintendo forecasts 16.5 million Switch 2 units sold this fiscal year, down from 19.86 million at launch
- Full-year operating profit forecast of 370 billion yen came in well below market expectations of 480 billion yen
- Some analysts called the guidance “overly conservative,” with Morningstar forecasting Switch 2 sales of 19 million units
Nintendo stock took a hard hit on Monday after the company posted full-year earnings and issued an outlook that left investors cold.
*NINTENDO SHARES FALL 9% AFTER EARNINGS, FORECAST MISS ESTIMATE
— zerohedge (@zerohedge) May 11, 2026
The stock closed 8.4% lower in Tokyo at 7,020 yen — its lowest level since August 2024. It has now fallen 34% in 2026.
For the fiscal year ending March 31, operating profit rose nearly 28% to 360 billion yen, helped by a near doubling of net sales. But that still missed market expectations.
The company’s guidance for fiscal year 2027 raised more eyebrows. Nintendo forecast operating profit of 370 billion yen, well short of analyst estimates of 480 billion yen. Annual sales are expected to drop 11.4% to 2.05 trillion yen.
At the heart of the concern is the Switch 2. Nintendo said it expects to sell 16.5 million units of the console in the current fiscal year — down from 19.86 million units since its June 2025 launch.
Switch 2 Price Hikes Hit Demand Outlook
On Friday, Nintendo announced price increases for the Switch 2 across the U.S., Japan, and Europe. In the U.S., the price went up $50. In Japan, it rose by 10,000 yen. Across markets, that’s a hike of between 7% and 20%.
The culprit: a surge in memory chip prices driven by AI infrastructure spending. Higher component costs are squeezing margins on the hardware and are expected to dampen consumer demand.
“The biggest factor is of course the price hike that Nintendo thinks will lead to softer demand,” said Serkan Toto, CEO of Kantan Games.
Software is also a concern. Nintendo guided for 165 million units of combined Switch and Switch 2 software sales in fiscal 2027 — a roughly 11% year-on-year decline. That guidance raised questions about Nintendo’s confidence in its game pipeline.
Investors are closely watching for when Nintendo will announce a “Nintendo Direct” event to reveal upcoming titles, particularly those featuring iconic characters like Mario and Zelda.
Analysts See Guidance as Too Cautious
Not everyone is bearish. Nintendo has a history of issuing conservative guidance, and some analysts think that’s what’s happening here.
Kazunori Ito, director at Morningstar, called the guidance “overly conservative.” He expects Switch 2 sales to reach 19 million units this fiscal year, above Nintendo’s own forecast. He also forecast software sales of 205 million units, well above the company’s 165 million guidance.
“We view Nintendo’s stock as undervalued,” Ito said, adding that the market is “underappreciating the long-term earnings growth from over 100 million Switch users migrating to the new platform.”
Toto echoed that view: “I believe that Nintendo is, as usual, lowballing because users will get used to the new price of the console over time.”
On a brighter note, Nintendo did flag a strong third-party game lineup coming in the months ahead. Early Switch 2 titles like “Mario Kart World” and “Pokémon Pokopia” have performed well — the latter sold over 4 million units in its first five weeks.
Toto added that a new Nintendo Direct laying out the 2026 software lineup could come as soon as next month.
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