Microsoft’s acquisition of Activision ‘transformational’, says DA Davidson

DA Davidson keeps a Buy rating and $415 price target on Microsoft (MSFT) after the completion of its Activision (ATVI) acquisition, though the analyst also calls a deal “transformational” as it could kickstart a period of meaningful growth in gaming and also believes that the acquisition is being underappreciated by the market despite how much publicity it has received over the past 20 months. The firm further contends that Microsoft’s approach in gaming is highly differentiated, and by combining with Activision, the Xbox is building a “titan in gaming”, calling the entity a “disruptive subscription service” in Game Pass with high quality IP playable anywhere.