Sea Limited Surges on Bank of America's Buy Rating and Growth Drivers

Sea Limited's stock rallied after Bank of America issued a Buy rating, citing the company's strong growth drivers. The firm sees Sea as best-positioned to benefit from its digital entertainment business.

Sea Limited's stock (NYSE: SE) experienced a notable rally on Thursday following a Buy rating from Bank of America. The investment bank highlighted Sea Limited's strong growth drivers, particularly its digital entertainment business, positioning the company as the best candidate to capitalize on the e-commerce boom in Southeast Asia.

Bank of America analyst Sachin Salgaonkar noted that Sea Limited's online marketplace, Shopee, is increasingly dominant in the region. Additionally, the expansion into Brazil and Latin America is seen as a significant growth opportunity. Salgaonkar emphasized that Sea Limited's stock has been range-bound for the last couple of months despite showing improving momentum. The analyst increased Bank of America's price objective on SEA to $215 from $206, attributing the move to strong fundamentals across the business.

Sea Limited's shares were up 4.8% in early trading on Thursday, adding to the +60% year-to-date run-up. Both Wall Street analysts and Seeking Alpha analysts maintain a consensus Buy rating on the stock.

In recent quarters, Sea Limited has demonstrated robust growth across its three core businesses: Shopee e-commerce, Garena gaming, and SeaMoney fintech. In Q2 2025, revenue jumped 38.2% year-over-year to $5.26 billion, with Shopee e-commerce sales growing 33.7% to $3.8 billion. Garena gaming bookings surged 23%, and SeaMoney fintech revenue skyrocketed 70%. CEO Forrest Li noted that all three businesses have delivered robust, healthy growth, fueling the recent stock rally.

Despite the strong performance, the stock has been volatile this week, with a 9.6% drop on Oct. 15, 2025. The stock closed at $163.42, down from its 52-week high of $199.30. Analysts expect continued double-digit revenue growth but have flagged high earnings estimates, which could put pressure on the stock.

Looking ahead, Sea Limited will report its Q3 results around Nov. 11, 2025. Analysts expect continued growth but are cautious about high valuation levels. The stock's valuation is now stretched at ~94x trailing EPS, with institutional ownership at about 59.5%.