Is Microsoft’s acquisition of Activision Blizzard good news for investors?

Microsoft Corp. (NASDAQ:MSFT) made headlines this week after the company announced plans to acquire the video game publisher ActivisionBlizzard (NASDAQ:ATVI).

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Microsoft CEO Satya Nadella said on Tuesday he expects the tech giant to buy the Call of Duty and candy Crush publisher for nearly $69 billion in cash. It would be the largest technology contract in US history.

For reference, $69 billion is more than double what the company has ever paid (it bought LinkedIn for $26 billion) and a similar sum to what the company has paid for its next five biggest acquisitions. important combined.

Microsoft stock took a small hit after the announcement and ended Tuesday down 2.4%. But Activision shares surged, closing up 26% at $82.31 on Tuesday.

This isn’t the first time Microsoft has sued a game company. The company announced in September 2020 its intention to acquire ZeniMax Media, the parent company of game publisher Bethesda Softworks. The deal closed for $7.5 billion in cash in March 2021, growing Microsoft from 15 to 23 game studios.

And Microsoft isn’t the only company looking for video game publishers. Throughout 2021, several other large tech companies have purchased smaller gaming companies. To name a few…

  • netflix (NASDAQ:NFLX) bought Night School Studio and added five video games to its streaming offerings
  • Epic Games has bought Mediatonic, the mastermind behind the popular board game Fall guys, and Harmonix, the Rock band editors
  • Tencent Holdings Limited (OTCMKTS:TCEHY) acquired Turtle Rock Studios, along with two other studios.

Sony group company (NYSE:SONY) bought five different studios in its hunt to dominate the gaming industry.

Shares of Sony have already fallen this month as investors acknowledge the threat of Microsoft’s planned acquisition.

For me, this new agreement is good news for Microsoft and Activision.

Microsoft sought a better position in the video game industry and the metaverse. Importantly, with the purchase of the video game publisher comes its customer base of 400 million people, which will expand Microsoft Gaming enormously. The deal is expected to put the company in competition with gaming giants and expand its already massive total addressable market.

News of the merger comes just a week before Microsoft’s expected earnings announcement for its second quarter of fiscal 2021 second quarter. Revenue is expected to grow 18% year-on-year to $50.88 billion. Earnings estimates have been revised up 4.1% in the past three months, so an earnings surprise is possible.

So, is MSFT stock a buy for profit? Well, according to my portfolio binder, It is.

As you can see from its report above, MSFT stock holds an A rating for its quantitative rating, as it continues to come under heavy institutional buying pressure. Its fundamentals are a bit lacking, as it holds an F rating for earnings momentum and a C rating for earnings surprises, though it still receives a C rating for its overall fundamental rating.

Add it all up and the MSFT stock has a total rating of B, making the stock a “buy” right now.

Now, while Microsoft is definitely a stock to watch, I’m more excited about what my Growth investor stocks have to offer. The stocks on my buy list are characterized by annual sales growth of 34.5% and annual profit growth of 44.4%. higher.

To learn more about the stocks I like the most right now, as well as my latest purchases and the list of top stocks, click here for all the details.

Truly,

Louis Navellier

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Publisher hereby declares that as of the date of this e-mail, Publisher owns, directly or indirectly, the following securities which are the subject of commentary, analysis, opinion, advice or recommendations in, or which are otherwise mentioned in, the dissertation below:

Louis Navellier, who has been called “one of the most important fund managers of our time”, broke his silence by this shocking “say it all” video… exposing one of the most shocking events in our nation’s history… and the one thing every american should do today.

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