CNBC’s Jim Cramer on Thursday warned investors not to buy battered stocks in video game companies like Activision Blizzard and Take-Two Interactive Software just for now.
“I’m not saying their downfall is over at this point – I definitely think they have more downsides – but at some point they will be cheap enough to be worth buying. We just haven’t gotten there yet.” he said.
Some of the other names to keep an eye on include sony, AMD, Microsoft and Nvidiaby Kramer.
Shares of video game companies have surged in the midst of the Covid pandemic as consumers ducked and turned to home entertainment. This changed when the economy reopened, leading to a boom in outdoor activities.
“In other words, life is too short to sit at home playing video games, or at least that’s how many consumers feel right now,” Cramer said.
He added that companies are also saddled with reliance on digital advertising revenue streams, which has weathered the recession as the Federal Reserve raised interest rates to slow the economy.
However, the hurdles the video game industry is facing are likely to subside, although it’s unclear when exactly, Kramer said.
“While the video game industry has come out of 2022 in one of its biggest losers… I think this may turn out to be a temporary issue rather than a permanent one. It’s too early to start bottom fishing here, but it ends up bottoming out,” he said.