5 Best Video Game Stocks to Buy Now

2. Activision Blizzard, Inc. (NASDAQ:ATVI)

Number of Hedge Fund Holders: 129

Activision Blizzard, Inc. (NASDAQ:ATVI) is a California-based video game publisher. Its most noteworthy games include the Star Trek series, WarCraft, James Bond series, and Sekiro along with several others. The stock is currently in the limelight after regulators in the UK blocked Microsoft’s planned buyout of the company.

In the fourth quarter of 2022, 129 hedge funds held stakes in the company, compared to 96 in the previous quarter. Berkshire Hathaway was the most prominent stakeholder of the company in Q4 with over 52.717 million shares worth $4.035 billion.

In the last three months, 14 Wall Street analysts have covered Activision Blizzard, Inc. (NASDAQ:ATVI) stock and all of them maintain a Buy rating on its shares. The average analyst price target is around $92.54.

Atai Capital made the following comment about Activision Blizzard, Inc. (NASDAQ:ATVI) in its Q1 2023 investor letter:

“Those familiar with Activision Blizzard, Inc. (NASDAQ:ATVI) will quickly realize this is by no means a small-cap stock and boasts a rather large $66B market cap. While our focus is firmly on small-cap stocks, there will be occasions when I see something in large-cap land that piques my interest.

For those unfamiliar with Activision Blizzard, they are a video game developer and publisher being acquired by Microsoft at $95/share. They develop and own IPs such as Call of Duty, World of Warcraft, Diablo, Overwatch, Hearthstone, and Candy Crush. These are some of the most valuable IPs in gaming, from both a business perspective and a popularity perspective. I’ve been an avid gamer for years and am not a fan of most of their games (quite the opposite actually), but I can still appreciate how valuable these IPs are. Activision games have some of the lowest expectations in the industry but still sell millions of copies. They are currently churning out a new Call of Duty every other year with practically no differences between the titles, and yet gamers consistently buy these “new” releases, every, single, time. In fact, the most recent release (MW2) was the fastest-selling COD game ever, amassing over $1B in sales in the first ten days after release. Candy Crush has been the top-grossing game franchise in the U.S app stores for twenty- two quarters in a row, and Diablo 4 is very likely to out-sell its predecessor Diablo 3 (30M+ copies over its lifetime) while being just as monetized via in-game skins and DLC’s if not better. Throw in the gaming secular tailwind, a highly competent CEO – Bobby Kotick, and I consider Activision to be a great business (what I’ve stated here is just high level of course) …” (Please click here to read the full text)