Here’s Why One Should Not be Selling LNW:ASX Anytime Soon

When it comes to building wealth in the stock market, investors often debate whether a stock is worth holding through cycles or simply trading for short-term gains. In the case of Light & Wonder (ASX: LNW), the decision is clear: One should be holding, and here’s why. This isn’t just a gaming stock — it’s a diversified entertainment and digital gaming technology company that is steadily strengthening both fundamentals and technicals, while also benefiting from powerful macro trends in digital gaming and technology.

Fundamentals: Growth That Can’t Be Ignored

In Q2 FY25, Light & Wonder delivered $809 million in revenue, up from the previous year, with net income at $95 million and AEBITDA of $352 million. That growth in earnings, despite cyclical headwinds, shows management’s ability to expand margins and unlock shareholder value. Importantly, management also raised FY25 EBITDA guidance — a strong sign of confidence — and continued its share buyback program, reducing share count while boosting per-share value.

Few companies in this sector are as balanced. LNW has three strong growth engines:

1. Land-Based Gaming – The traditional backbone, providing steady cash flows.
2. SciPlay Social Gaming – Digital social games that are scaling profitably.
3. iGaming – The fastest-growing segment, hitting record quarterly revenue.

This combination provides both stability and high-growth potential, positioning LNW as one of the best stocks to buy and hold for FY26 and beyond.

Industry Perspective: Where Gaming Meets Tech

The global gaming industry is one of the fastest-growing markets, driven by online casinos, mobile gaming, and immersive experiences. Digital gaming revenues worldwide are projected to keep compounding at double-digit growth rates through 2030. LNW’s strategic push into iGaming puts it at the heart of this transformation, where margins are higher and recurring revenues more predictable.

Competitors like Aristocrat Leisure, Playtech, and Evolution Gaming dominate specific niches, but LNW has an edge because of its multi-pronged strategy — it isn’t relying on just one stream. For investors, this diversification reduces risk and opens multiple paths for upside.

A useful case study is Evolution AB (EVO:STO), the Swedish giant in live casino gaming. Over the last five years, EVO stock skyrocketed because of strong iGaming demand. Similarly, LNW’s iGaming and digital expansion could replicate that success story for ASX investors who are early to the trend.

Case Studies: Lessons From Similar Growth Stories

• Aristocrat Leisure (ASX: ALL): Once focused mainly on pokie machines, Aristocrat expanded into mobile games and saw years of sustained growth. LNW is on a similar path with SciPlay and iGaming.
• Evolution Gaming (STO: EVO): A pure-play digital success story, showing how recurring digital revenues can drive exponential growth.
• NVIDIA (NASDAQ: NVDA): Not a gaming operator, but a supplier of the technology (GPUs) that power AI-driven gaming, streaming, and immersive experiences. NVDA is a reminder that tech enablers of gaming ecosystems often outperform expectations — a sector connection that makes LNW even more exciting.

Opportunities like these are a gold mine for younger investors, AI-driven portfolios, and dividend-seekers who want exposure to both entertainment and digital transformation.

Technicals: Signs of Strength

From a technical perspective, LNW is currently trading around $133, just below the 14-week EMA of $137.45 and the 200-week EMA at $140.50. While this indicates near-term resistance, it also shows the stock is consolidating within a strong support zone. The RSI at 45.96 suggests neutrality — not overbought, not oversold.

This stability signals that downside is limited while upside potential remains significant. In technical terms, the consolidation phase positions LNW as a strong holding in many investors’ portfolios, with the potential to rebound toward $150–$160 levels if momentum resumes.

Beyond Gaming: Why Investors Should Look at Tech Adjacencies

One reason a smart investor would be bullish is that gaming and tech are deeply connected. Companies like Light & Wonder rely on semiconductors, chips, and AI-driven tools to power their games and platforms. If you’re researching LNW, you should also be paying attention to:

• NVIDIA (NVDA): Leader in GPUs used in gaming and AI.
• AMD (AMD): Provides chips for consoles and PCs.
• Taiwan Semiconductor (TSMC): Manufactures chips for gaming and mobile devices.

These companies thrive as gaming becomes more digital and AI-powered. For an investor, building a portfolio with both gaming leaders like LNW and chipmakers like NVDA or AMD creates a well-rounded exposure to one of the most exciting megatrends of the next decade.

Why Holding

At its core, Light & Wonder offers the perfect mix: fundamental growth, technical resilience, and exposure to a booming industry. The raised guidance, strong buybacks, and record iGaming revenue reinforce my conviction. Add in the broader gaming ecosystem, where companies like NVIDIA and Evolution Gaming have shown massive upside, and the story becomes clear.

This isn’t just a stock for the next quarter — it’s a long-term compounder. For investors looking for exposure to digital gaming, AI-driven entertainment, and global gaming platforms, LNW is one of the best ASX stocks to hold for FY26 and beyond.

Bottom line: Opportunities like these don’t come often. LNW is positioned to deliver for short-term traders, long-term holders, and thematic investors looking at AI, gaming, and digital transformation. That’s why one should not be selling anytime soon.

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