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Why Activision Blizzard, Inc. Popped 17% in January

By Joe Tenebruso - Feb 13, 2018 at 9:02PM

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The video game giant's new esports league is off to a fast start.

What happened

Shares of Activision Blizzard (ATVI 1.90%) surged 17.1% last month, according to data from S&P Global Market Intelligence. The video game maker is dominating the sales rankings, while also making a bold move into the exploding market for esports.

So what 

Activision Blizzard entered January with momentum, after two of its games -- Call of Duty: WWII and Destiny 2 -- placed No. 1 and No. 2 among the best-selling video games of 2017. The strong sales performances of these titles landed Activision a slew of analyst upgrades  and price target increases. 

A screenshot of Activision Blizzard's Call of Duty: WWII game

Activision Blizzard's Call of Duty: WWII was the best-selling video game of 2017. Image source: Activision Blizzard.

The stock's ascent accelerated after Activision announced that it had struck a multi-year media rights deal with Amazon.com's (AMZN 3.58%) Twitch video streaming site. Amazon will reportedly pay $90 million over two years for streaming rights to Activision's new Overwatch esports league. Days later, Overwatch League went on to draw more than 10 million viewers during its opening week. 

"This league demonstrates the power and potential of esports, and we're thrilled to continue expanding our partnership with Blizzard," Twitch COO Kevin Lin said in a press release.

Now what

Activision Blizzard's shares have pulled back about 8% so far in February, after the company released good, if not great, fourth-quarter results. Investors may wish to consider using this pullback as a buying opportunity. Activision has multiple catalysts that can propel its growth in the coming years, including movies and TV shows, consumer products, in-game advertising, and, of course, esports. As such, the video game titan gives investors many ways to profit.

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Stocks Mentioned

Activision Blizzard, Inc. Stock Quote
Activision Blizzard, Inc.
ATVI
$77.94 (1.90%) $1.45
Amazon.com, Inc. Stock Quote
Amazon.com, Inc.
AMZN
$116.46 (3.58%) $4.02

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