The Great One took home the victory. And then,
the Great Eight evened the score. An epic battle took place a few weeks ago
between the greatest hockey player ever, and the upstartchasing his record.
Fresh off of winning the Stanley Cup with the
Washington Capitals, Alex Ovechkin took on Wayne Gretzky in a one-on-one
matchup of two of hockey’s greatest players. Only problem? Gretzky is 59, and
retired many years ago, while Ovechkin is in his prime, looking to capture at
least one (maybe two, or three?) more Stanley Cups. So, how did they split a
Gretzky was able to overcome his age
disadvantage (or some might argue wisdom advantage)…because
the game took place virtually, in EA Sports NHL 20.
And, its not just hockey. NFL players are streaming
virtual footballand games like Call of
Dutyto large audiences. NBA players are playing basketball, NASCAR drivers
are racing, and tennis pros are playing tennis. There is even betting available
via online gambling sites like DraftKings
Sports will be back. But, in the meantime, the
online gaming frenzy that had already been ignited by the likes of Fortnite, League of Legends, and other popular competitive online games, has
seen a surge in activity.
Not only are more people at home playing games,
but were all looking for entertainment. There are only so many Netflix (NFLX) shows you can watch in a
single night. So why not watch sports stars, who we are obsessed with already
(I know youve been watching ESPNs The
Last Dance), play video games and perform their sorely missed celebrations,
And, as more people play, and watch, and bet, on
video games, there are companies out there profiting from our newfound habits.
These are three of the companies reaping the benefit of the new normal.
Blizzard (ATVI) recently reported earnings, and
promptly jumped 6% higher. The stock is up over 20% in 2020. In the last few weeks Ive
written extensively about companies that are doing well in the current
environment. ATVI could be a poster child for that group of companies.
Not only is the company benefiting from a more captive audience, but has also
launched a very successful new edition of Call
of Duty, one of its franchise properties.
The new Call
of Duty: Warzone introduced a credible competitor to Fortnite, one of the most successful online games ever. And, as CEO
Bobby Kotick noted on the ATVI earnings call, the new game brought in over 60
million players since its launch.
Kotick said the company significantly exceeded our outlook for both revenue
and earnings per share in the quarter. Activision Blizzard revenue in the
first quarter was $1.79 billion, which was $148 million above guidance the
company had just issued in February. The company delivered $0.65 in earnings
per share and also upped its dividend to $0.41 annually, an 11% increase
beneficiary of the limits on other entertainment options has been Nintendo (NTDOY). If the last time you
picked up a game controller was to play Mario
Bros. on a Nintendo 64, youre missing out. The company has designed a
sleek new mobile gaming device, the Switch, that is the gaming platform for a
new generation of young gamers.
companies today have ubiquitous marketing as they tie their games in with
famous entertainers, movies, and social media. Fortnite has excelled at this with a number of themes tied to
everything from Disney (DIS) characters to rappers. Nintendo is promoting its Pokémon brand with Detctive Pikachu, a recently released
movie starring Ryan Reynolds.
recently reported a blowout quarter, with $3.3 billion in operating profit for
its fiscal year ending in March, a 41% year-over-year increase. While Nintendo
reported some supply chain issues due to the coronavirus, it appears to be back
on track assuming no worsening of the crisis in China, where many of its Switch
components are produced.
did lower guidance for 2020 slightly, but the company has a history of
under-promising and over-delivering.
we shouldnt forget the companies that make the guts of the gaming platforms
that are running all these games were playing. Nvidia (NVDA) is one of the leading chip makers for the gaming
industry, and it has a sterling reputation.
investors have been richly rewarded in 2020 thus far. The stock is already up
32% this year on the strength of the companys graphic processing units (GPUs) and
chipsets. Games today are cinematic in nature, and have graphics that require
powerful processors to show detail in what has essentially become a modern
version of art.
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has a secondary wind in its sails as well. Nvidia GPUs are a main component in
mining computers used by cryptocurrency miners. This business had fallen off
in recent years as cryptocurrencies, like Bitcoin, fell from record highs, but
as monetary stimulus leads to potential dollar devaluation and inflation,
cryptocurrency is making a comeback.
its most recent quarter, Nvidia reported earnings of $1.53 per share, up 66%
year over year. The company noted that it is seeing demand increase not only in
gaming, but for its products in 5G, genomics, robotics, and autonomous
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