Sumary of Electronic Arts and 2 Other Videogame Stocks to Buy Ahead of the Holiday Season:
- A scene from the Electronic Arts game, Battlefield 2042. Courtesy Image New consoles from Sony and Microsoft are still scarce amid the broader chip shortages, but an analyst at Stifel still sees upside for three videogame software stocks ahead of the holiday season.
- After leading the charge amid lockdown-fueled growth in 2020, these videogame stocks have lagged the broader market this year.
- A number of factors have hit the stocks, including hardware supply shortages, reopening trends hurting time spent gaming, crackdowns in China, and other company-specific developments, such as allegations of harassment at Activision Blizzard (ticker: ATVI).
- “We think this has negated any positive influence from the launch of newhardware from Sony and Microsoft, whereas in the past videogame stocks hadenjoyed outsized returns during the early stages of a console cycle,” Stifel analyst Drew Crum wrote in a note on Monday.
- That’s been bad news for live-services games—constantly updated online offerings that make money with in-game transactions.
- He has a $121 price target on Activision stock, though he does note that the high-profile gender bias lawsuit filed by California’s Department of Fair Employment and Housing could hang on the stock.
- Following the initial reports of the lawsuit, employees shared allegations of misconduct on social media and staged a walkout.