Despite the recent market rebound, many stocks trade below their 52-week highs. But Activision Blizzard (NASDAQ:ATVI) isn’t one of them. The novel coronavirus has proven to be a tailwind, not a headwind, for the video game giant. Activision Blizzard stock saw minimal pullback during March’s sell-off. And now, with markets rebounding, shares are above 52-week highs set back in February.
Don’t take this to mean Activision shares have “topped out.” Far from it. Coronavirus tailwinds are just the start. This is a great long-term play on the future of gaming. The company’s shares could easily rebound to all-time highs set back 2018. Or even higher.
Activision Blizzard CEO Bobby Kotick has said users could climb from 350 million to 1 billion by 2025. It won’t be long before Wall Street bids up shares in anticipation of massive growth runway. This isn’t the time to sit on the sidelines. Grab shares now, before it’s too late.
Coronavirus Tailwind Only the Start for Activision Blizzard Stock
With shelter-in-place orders still active across the globe, it’s no shock people may be getting “cabin fever.” With limited entertainment options out there, companies like Netflix (NASDAQ:NFLX) have seen a tremendous tailwind from the pandemic.
But streaming isn’t the only industry seeing a big boost from the outbreak. The video game industry is also seeing a fantastic windfall. March 2020 saw video game sales levels not seen in over a decade. Considering the “stay-at-home” economy continued through April, it’s safe to say we’ll see similar results this month.
But don’t think for a second Activision Blizzard stock is just a short-term coronavirus play. Sure, if you were shrewd and bought shares during last month’s pullback, you could reap a quick profit selling into strength today. But if you do so, you’ll be missing out on massive potential gains due to the company being on the winning side of the future of gaming.
What do I mean? The industry is expected to grow 27% between 2019 and 2022. By 2025, video game sales worldwide could top $300 billion. In short, the continued rise of video games as a major entertainment option will help to sustain Activision’s long-term growth.
Why Activision Is a Great Way to Play This Megatrend
There are plenty of video game stocks out there. Many of them make great buys, not only for today’s tailwinds, but for the long-term megatrend as well. But what in particular makes Activision stock a great way to play this trend?
For one thing, Activision owns an extensive library of video game franchises. These include Call of Duty, Candy Crush, and World of Warcraft. As these franchises remain popular, consider them a license to print money for Activision. The company can easily cash in with new versions of these games.
Also, consider the changing economics of the video game industry. Mobile gaming is fast becoming a major component of the overall industry. With the company launching mobile versions of its popular franchises, ATVI has another avenue to grow their top and bottom line.
But that’s not all! Let’s not forget e-sports. The company first stuck gold with its Overwatch League. But e-sports leagues around other franchises, like Call of Duty, could mean even more growth opportunity.
To top it all off, there’s an overarching factor to consider. Video games aren’t a youth pastime anymore. According to Statista, a plurality of video gamers are between the ages of 18 and 35. Clearly for millennials, “adulting” doesn’t include giving up their gaming consoles.
Any sort of social stigma from adults playing games is long past. For Millennials and Generation Z, video games will be a lifelong pastime. This is part-and-parcel to the long-term growth tailwinds of the video game industry at-large. And its a strong indicator that the growth train for Activision Blizzard stock will continue for years to come.
Now’s the Time to Buy Activision Blizzard Stock
Coronavirus wound up being a windfall for video game companies like Activision. Recent share price performance reflects this relative strength. Shares haven’t even topped out yet as they trade just below their 52-week highs.
There’s plenty of runway left for the company. On the winning side of the future of gaming, shares could easily bounce back to all-time highs set in 2018.
What’s the next move? Soon enough, Wall Street will get wise to the company’s long-term potential. Buy Activision Blizzard stock now, before shares move higher.
Matthew McCall left Wall Street to actually help investors — by getting them into the world’s biggest, most revolutionary trends BEFORE anyone else. The power of being “first” gave Matt’s readers the chance to bank +2,438% in Stamps.com (STMP), +1,523% in Ulta Beauty (ULTA) and +1,044% in Tesla (TSLA), just to name a few. Click here to see what Matt has up his sleeve now. Matt does not directly own the aforementioned securities.
