- Video game stocks are on the move, buoyed by results from Take-Two.
Take-Two (TTWO, +4.1%) is leading Activision (ATVI, +2.1%) and Electronic Arts (EA, +1.2%) higher after reporting a huge fiscal Q1 jump in bookings and issuing bullish guidance.
That indicates "continued strong gaming trends" from the pandemic tailwind, Morgan Stanley said in a note upping its TTWO price target to $176.
Video game companies are riding the stay-at-home lockdown benefits, with a surge in the number of people playing and the number of hours played.
Two video game and eSports funds, the Global X Video Games & Esports ETF (NASDAQ:HERO) and the VanEck Vectors Video Gaming and eSports ETF (NASDAQ:ESPO) are up about 50% in the past six months.
The stocks are looking like they could ride that momentum into the release of the new consoles. Sony’s PlayStation 5 and Microsoft’s Xbox Series X (with a TikTok feature?) are still slated for a holiday season debut.
Our “focus on connecting more players across more platforms will continue, as we … expand support for cross-play, and reach more platforms with our games – including the next-gen consoles coming later this year,” EA CEO Andrew Wilson said in EA’s earnings call last week.
Activision reports after the bell today. The consensus EPS Estimate is $0.69 (+81.6% Y/Y) and the consensus net bookings estimate is $1.7B (+40.5% Y/Y).
The stock looks to have shaken off a report that employees of its Blizzard Entertainment unit were circulating a spreadsheet on Friday that anonymously disclosed their salaries and pay increases. Wage disparity between employees and executives is a major bone of contention in the video game industry.
Sector Watch
Staying in Communication Services (XLC, +0.1%), Disney (DIS, -0.6%) will issue its results after the bell today. It will be interesting to see if there is any numbers or hints of how many Disney+ subscribers it retained after the surge of signups for its premiere of Hamilton.
App downloads surged 74% over that weekend.
Moving to tech, Intel (INTC, +0.6%) will be on the hot seat following its 7nm product delay at an investor meeting with UBS.
Jefferies boosted rival AMD (AMD, +0.6%) today on Intel’s “systematic” delay.
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DIS catching up to SPY in past 3 months