Are Video Game Stocks Overbought?

Among the cohort of stocks benefitting from the stay-at-home mandate stemming from the COVID induced shutdown have been video game makers.  The lead gaming stocks such as “Activision Blizzard (ATVI)”, “Electronic Arts (EA)”, and “Take-Two Interactive Software (TTWO)” have not only outpaced the strong rebound of the SPDR S&P 500 Trust (SPY)” but have hit 52-week highs.

As you can see, some names such as TTWO are outpacing the SPY by some 50% since the March lows.

The thesis is easy to understand as people stuck at home spend an increasing amount of time and money on video games for their entertainment.

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