Game on.
Glu Mobile soared earlier this week after Electronic Arts announced plans to acquire the mobile game developer for $2.1 billion.
Take-Two Interactive, meanwhile, fell Tuesday despite its quarterly beat. The company behind Grand Theft Auto and Red Dead Redemption did not unveil a release slate but did target 93 titles in five years.
Nancy Tengler, chief investment officer at Laffer Tengler Investments, told CNBC on Tuesday that she would trim her position in Take-Two if she owned it. She said one name in the space looks far more attractive.
“We’ve been playing the gaming game via Microsoft, and one of the reasons for that is that you get a lot more growth,” Tengler said on “Trading Nation.”
Microsoft is expected to post nearly 30% profit growth for its full year ending June, according to FactSet. Sales are forecast to have risen more than 14%.
“With the latest Xbox announcement and launch, which was the best in the company’s history, gaming revenues went above $5 billion for the first time, and Xbox Live now has over 100 million monthly active users, Game Pass 18 million, plus you get the cloud business and you get Office and Teams thrown in as well, so that’s our play,” Tengler said.
Mark Tepper, president of Strategic Wealth Partners, has put his money behind a different video game stock — Activision Blizzard.
“Activision, right now, is one of our top five holdings. In my opinion, they’ve got some of the best video game franchises. They’ve transitioned very well towards in-game purchases, and they have a good strong mobile footprint, and that’s what a lot of these video game makers want to get to,” Tepper said during the same interview.
Even so, it may make sense to hold or unload some of the stock after its run. Shares are up more than 100% since a March low.
“I think a lot of the easiest gains have been made in video games, unfortunately, so we will be trimming that position soon,” said Tepper.
Disclosure: Laffer Tengler Investments holds MSFT. Strategic Wealth Partners holds ATVI.
