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Richard Mashaal and Brian Gonick started buying GameStop Corp. GME -37.78% shares in September.

They aren’t Reddit day traders or Discord users. They are hedge-fund managers in New York. And when the stock surged from less than $10 a share to above $400 and the dust had settled, they were sitting on a profit of nearly $700 million, one of the great fortunes of the January market mania.

The GameStop surge is often cast as a triumph of amateurs over professionals. Which it was, to a degree. But it also was a trade that pitted professionals against other professionals—and few have made more money than Senvest Management LLC, Messrs. Mashaal’s and Gonick’s firm.

“When it started its march, we thought, something’s percolating here,” said Mr. Mashaal, 55 years old. “But we had no idea how crazy this thing was going to get.”

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Senvest’s interest in the videogame retailer was piqued by a presentation from the new GameStop chief executive at a consumer investment conference in January 2020.

At the time, most Wall Street analysts had rated the videogame retailer at “hold” or “sell.” The stock also was heavily shorted. Messrs. Mashaal and Gonick would come to know some of the top-returning hedge funds on Wall Street, including Melvin Capital Management, were bearish on the stock from regulatory disclosures.

But as they spoke with management, sussed out competitors and noted the involvement of activists in the stock, including Chewy Inc. co-founder Ryan Cohen, they eventually started buying. By the end of October, Senvest owned more than 5% of the company, paying under $10 a share for the bulk of the stock.

They thought that if GameStop could hold on until the next generation of videogame consoles came out and stoked demand for games and accessories, the company would get a boost. And they reasoned that if Mr. Cohen could help transform GameStop from a largely bricks-and-mortar operation into an online gaming destination, the company could be worth far more.