Today, investors in Peloton (NASDAQ:PTON) are seeing impressive gains. Indeed, PTON stock has appreciated more than 6% today on heavy volume. This move comes amid an overall red day in the markets.
Investors are pricing in higher risks associated with the economic reopening thesis. Stocks are getting hit hard by concerns that the delta variant could slow economic growth this year. Additionally, given how highly priced the stock market is relative to historical standards, many believe some sort of breather is in order.
However, for stay-at-home stocks like Peloton, news of more pandemic concerns actually could be viewed positively. After all, this is a stock that surged as a result of the pandemic. With lockdowns and restrictions placed on individuals being able to move freely outside their homes, stay-at-home fitness became one of the sectors to be invested in. Today’s market action suggests momentum could once again materialize for Peloton and its stay-at-home peers.
However, Peloton also has another catalyst investors are looking at today. Let’s dive into what the home fitness company announced and why investors are bullish on PTON stock right now.
PTON Stock on the Move With Announcement of Video Game Entry
Similar to the recent move by Netflix (NASDAQ:NFLX) this past week, Peloton announced today it’s preparing to enter the video game business.
Peloton’s plan is to debut an in-app video game titled Lanebreak. This video game will allow riders to compete against one another, with various targets and rewards provided. Players can choose a difficulty level, and their style of music to be displayed.
The name is still under development, and a timeline of sometime in 2022 has been announced. However, given the aforementioned catalysts for Peloton, it appears this is just another reason for investors to dive into this stock.
The gamification of fitness is something Peloton sees as key to growth over the long term. Accordingly, should this video game concept become a success, investors expect Peloton to expand its offerings.
For now, investors appear keen on considering this stock given the volatility in the market. This is a stock that’s on my watch list now, for this reason.
On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
