Nintendo (NTDOY) stock has dropped 17% due to surging memory chip costs, impacting margins on Switch 2 consoles. However, analysts name it a top buy for 2026. Despite facing tariffs and rising prices, Nintendo expects strong Switch 2 sales, with 10.36 million units sold. Pokémon Legends: Z-A sold 5.8 million units in its first week. Wall Street sells off amid concerns of rising component costs. Nintendo needs to maintain strong console sales to offset expenses. Profit margins are slim, but Nintendo has long-term contracts with suppliers. Analyst suggests taking profits due to potential market challenges.

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