Stocks to Buy

Amid the vast technology sphere, the video game segment is usually a no-brainer. Worldwide growth and mainstream acceptance have fueled gaming developers and publishers like Activision Blizzard (NASDAQ:ATVI). Unfortunately, Activision stock received a hammering due to competitive threats, disappointing revenues and broader market weaknesses. Things got even worse for the gaming giant earlier this month. Fears that management had no real answer for the free-to-play (FTP) Fortnite rattled ATVI stock. Moreover, competitors like Take-Two (NASDAQ:TTWO) suffered sharp volatility during this time despite posting relatively strong results. Additionally, the latest DLC (downloadable content) expansion from Activision’s prized franchise, Destiny, failed to live up to expectations. This, from Activision chief operating officer, Coddy Johnson:

"We have not yet seen the full core re-engage in Destiny, which has kind of led to the underpeformance against our expectations to date. Some players we think are still in wait-and-see mode. So when you're in, you're deeply engaged. If you're not, we're hoping now's the time to bring players back in and win them back."

While this latest disappointment played a role in Bungie's split with Activision, the two companies have had bad blood for years. It was reported that Bungie employees "cheered and popped champagne." Now game developer Bungie gets to keep Destiny. While the fallout wasn’t surprising considering the years of tension, it leaves Activision stock with a critical content gap. Besides these headwinds, we haven’t yet discussed the category five hurricane. In a rumor that was later confirmed, ATVI will cut 775 jobs, or 8% of its workforce. Typically, companies don’t announce massive layoffs following a record revenue-generating year. However, disappointments have sadly become the norm for ATVI stock. That said, embattled shareholders and speculators saw some reason for optimism. Despite reporting mixed results for its fourth-quarter fiscal 2018 earnings report beating on earnings per share but missing on revenue -- Activision stock gained 3% on Tuesday’s after-hours session, and is still trading 3% higher going into the open. Still, discount-diving ATVI has substantial risks. While the earnings print was okay, the company’s guidance was decidedly awful. For both the upcoming Q1 and full-year 2019, management badly undercut analysts’ expectations. [ipm_internal_ad_list ipm_ad__post_id_1="1327366" ipm_ad_copy_1="9%20U.S.%20Stocks%20That%20Are%20Coming%20to%20Life%20Again" ipm_ad_url_1="https://investorplace.com/2019/02/9-u-s-stocks-that-are-coming-to-life-again/" /] Can ATVI stock break out of its rut, or is the gaming giant merely setting up a bull trap? Here are my three main takeaways: Read Article