One Fast Growing Gaming Stock To Take Note Of

28 Sep 2021

By Stephen Ong, Senior Account Executive, Phillip Futures

Despite its size and rapid growth, the video game industry still has significant room for further development and it has been considered by many to be one of the winning sectors in this pandemic. For the past 2 years, while business shutdowns and social-distancing measures have limited entertainment options for most during the COVID-19 pandemic, the video game industry has done remarkably well. The lockdown restrictions during the pandemic made gaming a popular stay at home activity for many consumers.

Game downloads across the world were up 75% from 2019 to 2020, and companies such as Activision Blizzard Inc. (ATVI), one of the leading video game companies benefited tremendously from the surge in global interest. 

Fast Growing Video Gaming Stock

Price ($)(27/08/21)Market Cap ($B)EPSRevenue Growth (%)
Activision Blizzard CFD116.34564.113.3424.6

Source: REFINITIV

Activision Blizzard has three main divisions and is the largest video game software company by revenue. ATVI develops, publishes and distributes interactive entertainment titles for Playstation, Xbox and PC. Some of their well-known franchises include World of Warcraft and Call of Duty. 

ATVI’s video gaming assets rank among the most valuable in the industry, and it contributes to the company’s growth and development. The company has released hugely successful games under CEO Bobby Kotick’s leadership, and has consistently distributed dividends since 2010.

Both the top and bottom lines of ATVI’s second quarter earnings exceeded analyst expectations.

Based on Bloomberg’s report, here are the most important figures. Compared to expectations of $1.89B, revenue was $1.92B. The company reported $0.91 EPS against an expectation of $0.75. This world loves entertainment of all sorts, and video games are an especially compelling form of entertainment. Over the next few years, video games would likely continue to grow in popularity globally, allowing game publishers to expand operations both in developed and emerging markets by reaching new players.

The world loves entertainment of all sorts and video games are a particularly compelling form of entertainment. Over the next few years, video games will likely continue to grow in popularity globally, allowing game publishers to expand in both developed and emerging markets by reaching new players.

Some video game companies may not be able to continue creating successful franchises, but those that help to develop and grow the industry as a whole will likely reap the greatest rewards from continued growth. For investors, it may be worthwhile to keep in touch with this industry.

References: 

Activision Blizzard (NASDAQ: ATVI)


Stephen Ong is a Senior Account Executive with Phillip Futures. With over 20 years of experience in the CFD, Forex, and Futures markets, he offers actionable financial insights on multiple asset classes and how best to implement a successful trading plan on market view.

An Exchange Traded Fund (ETF) is a marketable security that is formed to track nearly anything, ranging from a specific index, sector, commodity, or increasingly, theme. They are most commonly used to track a basket of stocks, and can typically be accessed through the same channels as regular stocks. ETFs are typically separated into passively-managed ETFs that simply mirror the security they are tracking (e.g. the STI), and actively managed ones that attempt to deliver higher returns or specific investment objectives, often with a pre-specified theme in mind (e.g. ARK Invest’s Innovation ETF).

Why should I trade in ETF CFDs?

  • ETFs have been growing in popularity over the years. 2020 was the best year for ETFs yet, with global equity ETFs seeing more than $1T in inflows within a 12-month period. Using CFDs to gain exposure to ETFs allows for greater capital efficiency because only a portion of the contract value is required as margin to establish a position.
  • ETFs are particularly popular with investors seeking a relatively hassle-free investing experience, while desiring exposure to a range of specific and relatively understandable securities. Trading ETF CFDs brings greater convenience by eliminating the need for traders to hold multiple currencies in order to access global ETFs.
  • An investor wanting exposure to the post-pandemic economic recovery could open a position in the well-known SPDR S&P 500 ETF (SPY), which tracks the performance of the S&P 500. Another investor that may be convinced of the future importance of Environmental, Social and Governance concerns (ESG) may find the increasing selection of ESG-themed ETFs that track a basket of high ESG-rating companies to be a good investment, rather than cherry-picking individual equities by hand. ETF CFDs can act as a powerful tool for traders can profit from both directions of the market by taking on long or short positions.

A look at two ETF CFDs we offer:

1) Has the ARKK been sunk?

ARK Innovation ETF (ARKK) ARKK is an actively managed ETF by ARK Invest that invests in a range of companies based on their innovative and industry-disrupting potential. ARKK’s largest holdings are in companies such as Tesla, Square, and Zoom. ARKK is down around -33% from peaking on 12th Feb and is currently in the red for the year to date as the market experiences a risk-off outflow of funds. Superstar fund manager Cathie Wood has however been consistently doubling down on her bets, buying even more shares in growth stocks that are going through their own tumultuous periods such as DraftKings, Peloton, Teladoc, and Tesla. In her view, ARKK is playing the long game, and remains steadfastly convinced in the long-term prospects of these growth stocks beyond this current bout of volatility. Similarly on outflows, investors are still betting big on ARKK as ARK Invest has only lost about $1.2B in assets this year across all its six funds, compared to seeing an inflow of $15.1B during the same period. Recently, investors have been nervously eyeing ARKK’s basket of tech stocks as their future earnings potential remain vulnerable to erosion through high inflation – the dominant concern of the market in recent weeks. As commodities – the major contributor to the recent heightened inflation fears – drops sharply from record highs, are investor concerns over hyperinflation overblown?

2) Searching for exposure to Asian equities?

iShares MSCI Asia ex Japan ETF (AAXJ) The AAXJ is currently trading -10.6% adrift of all-time highs seen in February, giving up gains in tandem with an Asia-wide equity sell-off at the time. Given that slightly over 40% of the ETF’s holdings are based in China, the ongoing tumult seen in Chinese equities currently have carried over nearly perfectly in the AAXJ, as Chinese investors take a breather after the stellar gains made over the past year. Looking ahead, Asia – and particularly China, is steaming ahead with its economic recovery. China is widely expected to be one of the best-performing major economies this year, providing a major boost to the outlook for corporate earnings. As the rest of Asia and the world gradually opens up their own economies, AAXJ is likely to again benefit from strong Asian outperformance amidst a strengthening trade outlook.

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