Please ensure Javascript is enabled for purposes of website accessibility

How Will Activision Blizzard Stock Fare After a Coronavirus Vaccine?

By John Ballard – Updated Aug 10, 2020 at 10:56AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Management sees strong engagement levels for top franchises continuing in the short term.

Shares of Activision Blizzard (ATVI -1.04%) have rocketed 39% higher since January. Video game stocks have been good havens for investors during the coronavirus pandemic, with the spike in the time spent playing games. Activision owns some of the most popular titles, including Call of Duty, Candy Crush, and World of Warcraft. Altogether, it has 428 million users across its games.

Here is how Activision Blizzard fared during the pandemic, and what to expect once everyone has a normal social life again. 

Video game controllers laying on a floor in front of a TV.

Image source: Getty Images.

Activision saw its player base grow 30% year over year in the second quarter, which added more than 100 million players to its ranks. That sent net bookings, an adjusted measure of revenue, up 72% over the year-ago quarter, while adjusted earnings jumped 53%.  

Activision Blizzard's Candy Crush mobile game saw a moderation in engagement toward the end of the quarter as businesses started to reopen. But shooters like Call of Duty, which tend to draw the most dedicated players, continue to maintain heightened levels of engagement. 

During the second-quarter conference call, CEO Bobby Kotick expressed optimism about the rest of the year: "In the near term, while the economic outlook remains very unclear, the ongoing commitment of our creative and commercial teams should enable us to remain on track to deliver great new content in the second half of the year. We now expect record full-year net bookings and earnings per share." 

What to expect

Activision won't continue to nearly double its net bookings every quarter looking beyond 2020, but it has a lot in the bag regardless. It's currently working on sequels and mobile versions of existing franchises, so this is a growth stock worth holding. 

John Ballard owns shares of Activision Blizzard. The Motley Fool owns shares of and recommends Activision Blizzard and recommends the following options: long January 2022 $75 calls on Activision Blizzard and short January 2022 $75 puts on Activision Blizzard. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Activision Blizzard Stock Quote
Activision Blizzard
ATVI
$73.94 (-1.04%) $0.78

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
351%
 
S&P 500 Returns
115%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 11/29/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.