Like other video-game investments, Activision Blizzard (NASDAQ:ATVI) stock has had more than its fair share of ups and downs. Video game trends tend to come in waves, and in some cases Activision Blizzard stock spearheaded those trends.
Nimble traders can capitalize on video-gaming trends as they occur through a position in this stock. Indeed, even with the novel coronavirus putting pressure on many stock-market sectors, Activision Blizzard shares have proven resilient.
Stay-at-home mandates have dented some industries, but video gaming remains a robust market. The reality is it is one of the few things that both kids and adults can do when they’re cooped up for extended periods of time. This angle makes Activision Blizzard stock an ideal choice for safety-minded and growth-oriented investors today.
Activision Blizzard Stock’s Undeniable Momentum
Like many other investments, Activision Blizzard stock took an appreciable hit in March. The first half of April was a completely different story, however. The share price easily reclaimed its February high point and then some.
Taking a short position in this stock would be reckless at this point as the buyers are fully in control. Video gaming is basically America’s national pastime now as sports, trips, shopping at stores, and dining out have become challenging, risky, and possibly even illegal in some places.
Jefferies analyst Ken Rumph summed up the video-game market’s firm foothold as this highly abnormal “new normal” becomes entrenched in American culture:
Video games have become a safe haven, actually benefitting from stay-home… The risk of delayed games or recessionary revenue dips aren’t yet denting market enthusiasm amid the rally.
Rumph made an excellent point here. Your father and grandfather might not have ever considered a video game stock as a safe haven. Yet, times have changed and we must position our investments for a post-coronavirus world.
Activision Blizzard stock can easily fit into that framework. This stock’s powerful momentum is based not on hope but on the reality that like it or not, life will be like this for a while. If video gaming was a niche interest once, now it’s indubitably a mainstream part of society.
The Hits Keep on Coming
Video game aficionados know that certain companies produce once bestseller after another. Customer loyalty is strong in the gaming world. It’s similar to movie franchises, where one big hit is likely to spawn successful sequels.
In this regard, few if any video game companies have a track record that compares favorably to Activision Blizzard. Three particular video game series keep gamers coming back again and again with each new release. The common feature of these games is that they’re super-addictive.
Take “Call of Duty,” for example. This video-game series has been around since 2003 yet its appeal hasn’t dwindled at all. Even after a dozen sequels, the “Call of Duty” gaming series continues to bring gritty, realistic scenes of military-style action to legions of fans.
Also popular is Activision Blizzard’s “World of Warcraft” series, which has been around nearly as long as “Call of Duty,” but this highly engrossing line of games appeals more to fantasy-genre gamers. Believe it or not, there are over 100 million “World of Warcraft” accounts.
What’s particularly appealing about this series is that it encourages multiple-player gaming. With stay-at-home mandates in effect, people can’t always be in close physical proximity, but at least they can collaborate and socialize remotely via “World of Warcraft.”
Another smash hit is Activision Blizzard’s ever-popular “Candy Crush” series of family-friendly puzzle-type games. This line of games has been around for seven years and has been played by over 500 million people.
Clearly the company has made the most of its perennially popular franchises. Stockholders can count on Activision Blizzard continuing to execute on its tried-and-true strategy of delivering solid hits to eager gamers.
The Final Word on Activision Blizzard Stock
I’ve assigned a “A” rating on Activision Blizzard stock because it perfectly straddles both the safety stock and momentum investment categories. A world on lockdown might not be fun, but at least there are video games to keep us entertained and connected. And Activision Blizzard will keep on making them.
Louis Navellier may hold some of the aforementioned securities in one or more of his newsletters.