Microsoft: Activision Deal Closes, Kicking Off a New Era in Gaming

On Oct. 13, wide-moat Microsoft closed its acquisition of Activision, resulting in no change to our $360 per share fair value estimate. The regulatory approval process entangled the $69 billion transaction for 20 months, with the deal being left for dead and eventually revived along the way. We see shares as undervalued, as strength in 2023 for software has waned since mid-July. The company reports first-quarter earnings on Oct. 24, which is when we expect an initial update surrounding the transaction.