Take-Two's AI Departure Fuels Bearish Bets Ahead of Pivotal Launch

Investors pile into bearish options as Take-Two dissolves its AI team, contradicting CEO's bullish messaging, while hopes rest entirely on GTA VI's 2026 launch.

Investors are piling into bearish options for Take-Two Interactive Software, signaling deep skepticism even as the company approaches the release of its most anticipated game in a decade. Trading data from Friday revealed a near-doubling in the volume of put options purchased, a surge of roughly 90% above the average daily activity. This rush for downside protection underscores a market contradiction: while analysts maintain bullish price targets, the stock has fallen about 20% year-to-date, recently trading around 170.70 euros and below its 200-day moving average.

The bearish sentiment is being stoked by a surprising internal move. This week, the video game publisher dissolved its entire artificial intelligence division, including its head, Luke Dicken, who announced his departure via LinkedIn on April 2. The decision stands in stark contrast to recent corporate messaging. On the latest investor call, CEO Strauss Zelnick had actively promoted the company's engagement with generative AI, citing "hundreds of pilot projects and implementations" across the business and previously assuring that AI would not be used as a tool for job cuts.

This disconnect between public statements and internal action is unlikely to bolster investor confidence ahead of a critical product cycle. The AI team's elimination follows a broader cost-cutting pattern, including a 5% reduction in its workforce and a studio closure in 2024 aimed at saving approximately $165 million. Notably, Zelnick has since emphasized that generative AI played no role in developing the upcoming "Grand Theft Auto VI," marking a deliberate shift away from an industry-wide trend toward traditional development methods.

All near-term hopes are pinned on that single title. Zelnick has explicitly confirmed GTA VI's console launch for November 19, 2026. Industry insiders now suggest a PC version is targeted for February 2027, a significantly shorter gap than seen with previous Rockstar Games releases. The title's importance was highlighted after a prior delay shock triggered an 18% stock plunge. The company's management is banking on the 2027 fiscal year to establish a completely new financial foundation built on GTA's success.

Before that potential payoff, however, investors face a rocky interim. Estimates for the upcoming quarter forecast a steep year-over-year profit decline of nearly 47%. The company's most recent quarterly performance showed net bookings of $1.76 billion.

Despite the options market skepticism and weak short-term earnings outlook, Wall Street's official stance remains positive. Most analysts retain a buy recommendation. Wells Fargo recently adjusted its price target slightly downward from $295 to $293 but kept its Overweight rating. The average price target among major investment banks sits above $284. Whether the AI department's dissolution represents a strategic pivot or simple pre-launch cost discipline is an open question, but it has undoubtedly amplified the market's near-term unease.