×

This is the best-performing tech stock this year, and no one is talking about it

Activision Blizzard has been on a stealth rally this year, soaring nearly 76 percent, and traders are betting on an even bigger rally ahead.

The video game giant is the best performing tech stock in 2017, quietly hitting an all-time high on Thursday.

According to Mark Tepper of Strategic Wealth Partners, the gaming industry is growing at around 16 percent a year, and that has grabbed the attention of investors.

"We'd be owners. Activision is a really intriguing play. The growth opportunity's huge," Tepper said Thursday on CNBC's "Power Lunch."

Tepper added that gaming is "becoming more social, which means people are playing longer and longer, and the profit per user is growing at 6 percent. This particular company, Activision, they've got the leaders in gaming with Call of Duty, Overwatch, Candy Crush. I'm getting the Candy Crush invitations every day on Facebook, so we'd be a buyer."

Matt Maley of Miller Tabak said that while he likes the stock at current levels, he would proceed with caution when looking at the tech sector.

"I like the stock here, and especially if it breaks off from its current level, because it would give it a nice higher high," he explained. "[But] as good as Activision looks, there is a yellow flag in the tech stocks overall because the SOX semiconductor index, which has been a key leading subgroup for the tech stocks, is starting to roll over a bit."

The tech ETF, XLK, is the best-performing sector this year — surging more than 22 percent.

Maley reiterated that investors should be cautious. "This really is a yellow flag. If we see further weakness in the stocks, and we have stocks like Micron continuing to break down, that's going to turn a yellow stock into a red stock, and maybe we'll see a little bit more of a breather in the tech rally," Tabak warned.

Activision posted better-than-expected earnings of $0.55 per share on $1.42 billion in revenue and reported 407 million monthly active users in the second quarter.

Vote
Vote to see results
Total Votes:

Not a Scientific Survey. Results may not total 100% due to rounding.

Videos

Trades to Watch

Trader Bios

About

Trading Nation is a multimedia financial news program that shows investors and traders how to use the news of the day to their advantage. This is where experts from across the financial world – including macro strategists, technical analysts, stock-pickers, and traders who specialize in options, currencies, and fixed income – come together to find the best ways to capitalize on recent developments in the market. Trading Nation: Where headlines become opportunities.

Brian Sullivan

Brian Sullivan is co-anchor of CNBC's "Power Lunch" (M-F,1PM-3PM ET), one of the network's longest running programs, as well as the host of the daily investing program "Trading Nation." He is also a frequent guest on MSNBC's "Morning Joe" and other NBC properties.

Read more

Connect