Quantcast

Why Activision Blizzard Stock Has Gained 20.5% in 2018 (So Far)


What happened

Activision Blizzard (NASDAQ: ATVI) has outperformed the market through the first six months of 2018, jumping 20.5% compared to a 1.7% uptick in the S&P 500 , according to data provided by S&P Global Market Intelligence .

The rally added to significant gains for long-term shareholders, who have seen their investment rise by roughly 200% in the past three years.

^SPX Chart

^SPX data by YCharts .

So what

Activision's most recent quarterly report didn't include particularly impressive headline numbers. In fact, its pool of active gamers shrank during the period .

However, that drop was driven by the cadence of its gaming releases, and not by any decline in user engagement in franchises like Call of Duty a nd World of Warcraft . On the contrary, these core titles are attracting plenty of player investments while new franchises like Overwatch set new monetization and audience records.

Young man and woman playing video games.

Image source: Getty Images.

Now what

Activision has formidable assets that position the company to reap huge financial rewards as the video game industry grows and shifts more toward a digital sales model. It all starts with an industry-leading portfolio of intellectual property, and the developer is extracting maximum value from those brands through initiatives that promote subscription services and microtransactions.

Looking further out, Activision's investments in areas like esports, advertising, and consumer products all look promising as additional revenue streams that might lift revenue higher over the next few years even as profit margins continue rising thanks to the digital fulfillment shift.

Find out why Activision Blizzard is one of the 10 best stocks to buy now

Motley Fool co-founders Tom and David Gardner have spent more than a decade beating the market. (In fact, the newsletter they run, Motley Fool Stock Advisor, has tripled the market!*)

Tom and David just revealed their ten top stock picks for investors to buy right now. Activision Blizzard is on the list -- but there are nine others you may be overlooking.

Click here to get access to the full list!

*Stock Advisor returns as of June 4, 2018

Demitrios Kalogeropoulos owns shares of Activision Blizzard. The Motley Fool owns shares of and recommends Activision Blizzard. The Motley Fool has a disclosure policy .

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.



This article appears in: Personal Finance , Stocks
Referenced Symbols: ATVI



More from Motley Fool

Subscribe






Motley Fool
Contributor:

Motley Fool

Market News, Investing










Research Brokers before you trade

Want to trade FX?