Top Video Game Stocks To Watch After Activision Blizzard Beat Estimates

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Top Video Game Stocks To Watch After Activision Blizzard Beat Estimates

May 5, 2021 6 min read

This story originally appeared on StockMarket

Activision’s strong performance puts these video game stocks on investors’ radar

Video game stocks could be under pressure along with the stock market pullback this week. But one thing is certain. In other words, their basics will be preserved, at least in the short term, as the coronavirus pandemic acts as a short-term tailwind. For example, Activision Blizzard (NASDAQ: ATVI) exceeded analyst expectations for the first quarter thanks to its popular Call of Duty and Candy Crush franchises.

Revenue for the first quarter was $ 2.07 billion, beating estimates of $ 1.78 billion. Activision Blizzard reported earnings of $ 0.84 per share, beating analysts’ estimates of $ 0.70 per share. According to yesterday’s earnings announcement, the company’s share rose by around 5% at market launch. There is no question that staying home policies mean that millions of people who stay home do not have many activities to do. And that sent video game sales through the roof.

Of course, the top video game stocks are feeling the pressure across the board as the stock market still depends on the latest tech router today. This would lead some investors to outsource these profitable names. However, many analysts view gaming as a high-growth industry that will only expand over time. Be it from a short-term trading or long-term investment perspective, the gambling industry is an attractive sector to look out for. Will aspiring investors turn off their controllers and make a list of the best video game stocks available to buy right now?

Buy video game stocks [Or Sell] In May

Electronic Arts Inc.

The first company on this list of the best video game stocks to see this winning season is Electronic Arts. Electronic Arts is currently one of the world’s largest video game publishers. It has grown to be the largest video game company in the United States by sales and market capitalization. Some of the games it produces include Need For Speed, EA Sports, Battlefield, Star Wars, and many more. So let’s take a look at what this big video game company has been up to lately.

Source: TD Ameritrade TOS

The company recently announced that it had sealed the deal to acquire Glu Mobile (NASDAQ: GLUU). The aim of this acquisition is to help accelerate Electronic Arts’ efforts in the mobile game space. Electronic Arts quoted its CEO Andrew Wilson as saying, “With Glu Mobile in our portfolio, we are a powerful growth engine that expands our current games and offers more amazing new experiences in sports, lifestyle, mid-core and casual sports for gamers everywhere. “

Electronic Arts is expected to deliver its upcoming quarterly results after the market closes on Tuesday, May 11th. The gaming company has exceeded expectations for the past four quarters. According to Refinitiv, sales will increase by 16.6% and 24.5% in fiscal 2021 and 2022, respectively. With that in mind, would you put EA stock on your watchlist next week ahead of the financial results?

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Nintendo Co. Ltd.

The next video game inventory to add to your watchlist is Nintendo. The company is known for developing consoles such as Wii, Game Boy, Super Nintendo and, most recently, Nintendo Switch. One can simply assume that the Nintendo Switch gaming system is currently the face of the company. The success of this hybrid console has thrown Nintendo shares across the roof in recent years. The company is expected to release its quarterly results before the opening bell on Thursday, May 6th.

Top Video Game Stocks (NTDOY Stock)Source: TD Ameritrade TOS

Undoubtedly, most of Nintendo’s business right now comes from Switch consoles and their game sales. So far, things are going very well for the company, having sold 24.1 million hardware units in the nine months ended December 2020. This corresponds to a sales growth of 35.8% compared to the previous year.

Nintendo’s strong market presence is not unfounded. First, the switch can be used either as a handheld device or as a console docked on a television. This flexibility creates more ways to interact with families and friends with exclusive titles like Mario Kart 8, Just Dance, and Animal Crossing, to name a few. The growth rate for Nintendo looks fantastic. And NTDOY stock is up more than 300% in the past 5 years. If you think the Switch could bring more growth to the company, what would happen if the company launched the rumored “Switch Pro”? Only time can tell.

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Sony Corporation

Sony is a game company that developed the PlayStation series, which is arguably one of the most popular game consoles in the world. The company also develops and sells a wide range of electronic devices, instruments and devices for the consumer and industrial markets. The company recently reported its fourth quarter results, beating estimates.

best video game stocks (SONY stock)Source: TD Ameritrade TOS

In detail, the company reported net income that rose over 700% to $ 983 million. This equates to earnings per share of $ 0.79. Sony also reported that total revenue for the quarter was a whopping $ 20.4 billion, up over 26% year over year. That huge increase in sales is likely due to the new generation console that was released late last year. The PlayStation 5 had limited availability immediately after launch, and it continues to do so.

Given that it has been 7 years since the company’s previous generation PlayStation was released, many consumers have been eagerly awaiting updates to their gaming systems. Would you consider adding SONY stock sideways for most of this year?

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Microsoft Corporation

Tech giant Microsoft has also been diversifying into the video game industry for some time. The company posted a strong quarter last week, with sales and earnings beating analysts’ estimates. While the company is more of a software company than a video game company, its own Xbox game console is one of the best-sellers in the gaming market.

Top Video Game Stocks to Buy (MSFT Stock)Source: TD Ameritrade TOS

However, Microsoft also began to delve into game development, closing the Bethesda game maker on a $ 7.5 billion deal with Zenimax. Such a smart acquisition means Microsoft can lock some of Bethesda’s current and future games as exclusive. And that could increase profits for the gaming division. In fact, gaming has been one of Microsoft’s fastest growing businesses since last quarter. The post-pandemic rebound is likely to lead to a rebound in the company’s non-gaming products, spurring growth in 2021 and 2022.

Microsoft has long been known as one of the “Big 3” video game companies alongside Sony and Nintendo. Given its strong position in the cloud gaming market with Azure, I am not surprised if the company plans further plans to expand its cloud gaming market share. If Microsoft is looking to thrive in the gaming industry in the near future, is that enough to make them think about MSFT stocks?