Too early to buy video game stocks like Activision and Take-Two

CNBC’s Jim Cramer warned investors Thursday against buying struggling video game company stocks like Activision Blizzard and Take Two Interactive Software Now.

“I’m not saying they’re finished at this point – I definitely think they have more downsides – but eventually they’ll be cheap enough to be worth buying.” It’s just that we’re not ready yet,” he said.

Some of the other names to keep an eye on are among others sony, AMD, Microsoft and NVIDIAso Cramer.

Video game companies saw their stocks soar during the height of the Covid pandemic as consumers hunkered down and turned to at-home entertainment. That changed when the economy reopened, leading to a boom in outdoor activities.

“In other words, life is too short to stay home and play video games, or at least that’s how many consumers seem to feel right now,” Cramer said.

He added that businesses were also weighed down by reliance on digital advertising revenue streams, which saw a decline as the Federal Reserve hiked interest rates to slow the economy.

Still, headwinds for the video game industry are likely to ease, though it’s unclear when, Cramer said.

“While the video game industry came out of 2022 like one of its biggest losers… I think it might just turn out to be a temporary problem, not a permanent one. It’s too early to start bottom fishing here, but eventually there will be a bottom,” he said.

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