If there’s one industry that is recession-proof, it’s gaming. That’s because gamers often become addicted to the titles they play, making these items a must-have no matter what the economic backdrop, almost like groceries. To boot, American consumers are feeling more confident about the economy today than they have in nearly 20 years, based on the latest economic data, despite the raging U.S./China trade war. This optimism could pave the way for more gains in stocks such as Activision Blizzard.
Activision Blizzard (ATVI) which boasts a user base of some 300 million gamers monthly, is trading decidedly in the green today while the broader stock market is meandering between positive and negative ground. The company is riding on the coattails on the rerelease of its popular classic game, World of Warcraft. The relaunch is a resounding success, as evidenced by subscribers having to wait in line just to get a spot in the game.
With the holiday shopping season nearly around the corner, this gaming stock – which is trading near its best levels of 2019 – could be in a perfect position to benefit even further.
KeyBanc Capital Markets Research Analyst Tyler Parker is bullish on gaming stocks, but reportedly he pointed out in a note to clients that these companies are up against difficult comps vs. last year’s holiday season. Nonetheless, he has an “Overweight” rating not only on Activision Blizzard but also gaming peers Take-Two and Ubisoft.
Parker points to the rerelease of World of Warcraft, which made its original debut a decade and a half ago, coupled with the tailwind of “Call of Duty Mobile” as catalysts for the gaming stock.
Disclaimer: This article is intended for informational purposes only and should not be taken as investment advice.
Last modified: September 23, 2020 12:55 PM