3 Video Game Stocks Worth PlayingVideo game stocks sit poised to benefit from consumers spending more time at home this holiday season. Here are three plays to consider.
Video game stocks were big winners in the first half of 2020, benefiting from people looking to stay entertained while spending more time at home during the coronavirus pandemic. As infection numbers continue to rise in many parts of the world heading into winter, consumers will likely once again try their hand at gaming to ride out the holidays until COVID-19 vaccines arrive early next year.
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“While we wait for a vaccine and eventual economic recovery to unfold, video games are an attractive place to be invested as they benefit from cyclical weakness and stay-at-home orders in the short term,” Deutsch Bank analyst Bryan Kraft told clients, per Business Insider.
Below, we take a look at three video game stocks and turn to technical analysis to identify possible trading opportunities.
Electronic Arts Inc.
With a market capitalization of $37.92 billion, Electronic Arts Inc. (EA) markets, publishes and distributes video games, content, and services for game consoles, PCs, mobile phones, and tablets. Some of the video game publisher’s well-known franchises include “Madden,” “FIFA,” “Battlefield,” “Apex Legends,” “Mass Effect,” “Dragon’s Age,” and “Need for Speed.” Over the holidays, the company plans to release highly-anticipated titles “Medal of Honor: Above & Beyond” and “Mass Effect Legendary Edition.”
Management said it expects third-quarter bookings of $2.35 billion while seeing full-year bookings reach $5.95 billion. From a charting perspective, the share price broke above a descending channel earlier this month. This may give rise to a retest of the 52-week high at $147.36.
Activision Blizzard, Inc.
Activision Blizzard, Inc. (ATVI) develops and distributes content and services on video game consoles, PCs, and mobile devices. The $63.58 billion video game maker owns an impressive franchise portfolio that houses “Call of Duty,” “World of Warcraft,” “Diablo,” “Hearthstone,” “Overwatch,” and “Candy Crush.” Upcoming games in the pipeline include “Overwatch 2” and “Diablo IV.”
The company forecasts full-year revenue of $7.7 billion and earnings of $2.61 per share. Meanwhile, analysts expect sales of $7.8 billion and earnings of $2.59 a share. ATVI shares have also broken out above a descending channel this month that places the bulls firmly in control. Look for upside momentum to push the price back toward its all-time high at $87.73.
Take-Two Interactive Software, Inc.
Take-Two Interactive Software, Inc. (TTWO) develops, publishes, and markets interactive entertainment solutions. The New York-based video game publisher behind franchise hits “Grand Theft Auto” and “NBA 2K” reported fiscal second-quarter net income of $99.3 million, or 86 cents per share. This compares to a net profit of $71.8 million, or 63 cents a share in the year-ago quarter.
Looking ahead, the company said it plans to release 93 games over the next five years, with 47 of those coming from existing franchises. Turning to the charts, the share price has consolidated near the August high over the past week, indicating the stock may continue trending upwards during the coming months.
For a look at today’s earnings schedule, check out our earnings calendar.