These tech over-performers, all pandemic-resistant, are wise long-term investments during these volatile market conditions and have made big moves recently
Aug. 29, 2020
What pandemic? The tech sector has been outperforming the market all year. The Dow Jones is down nearly 1% for the year and the S&P 500 is up around 7%. The tech-heavy NASDAQ and specifically the XLK Technology ETF, however, are both up 30% and 31%, respectively. Here are five of the big players in various subdivisions of the pandemic-safe tech sector that actually benefited from the outbreak, ordered by stock price growth this year, as of August 26.
Videoconferencing company Zoom (NASDAQ: ZM) made its stock market debut on April 18, 2019 as a profitable unicorn and has seen spectacular growth, with its stock price surging 330% this year. With most employees and students forced to stay at home, Zoom was able to commandeer a nearly 43% market share in its sector, even amidst multiple security controversies. The pandemic has secured Zoom’s role as an essential global infrastructure company, growing its daily meeting participants tenfold to 300 million. The young company was able to do this by offering easy installation, an intuitive interface, high capacity, and reliability, making it the gold standard in video-conferencing.
Amazon (NASDAQ: AMZN), as the number one e-commerce company in the U.S. (with a 38.7% market share) and the top cloud provider in the world (33% market share), was doing just fine before the outbreak. Once stores were shuttered and people were forced to stay at home, the company, valued at over $1.7 trillion, was able to double its profit from last year to a record $5.2 billion. Also, AWS exceeded $10 billion in revenue for the first time ever in Q1; its stock price is up over 81% for the year. Amazon Prime subscriptions grew to over 118 million members in the U.S. alone.
Just look at our returns versus that of the S&P 500! Click here to find out how we continue to beat the market and view the list of stocks we think will turn out to be the next Amazon, Tesla, or Netflix!
3. Advanced Micro Devices
The best performing stock of the S&P 500 in 2018 and 2019, Advanced Micro Devices (NASDAQ: AMD) is giving its biggest rival, Intel, a run for its money as it continues to gobble up market share — the company’s stock price is up over 75% this year while Intel’s is down over 17%. This is thanks in large part to AMD’s announcement that its 5nm line of chips will debut next year. The company has seen a 61% increase in market share from last year and is expected to exceed a 10% market share in the profitable server sector this year; Jefferies analyst Mark Lipacis expects it to be at 50% in five years. Thanks to the pandemic, the company has seen sales growth in both its server and laptop divisions; additionally, it will see revenue from the release of Sony’s PlayStation 5 and Microsoft’s XBOX Series X video game consoles this holiday season for which it will be the exclusive provider of both CPUs and GPUs.
The first $2 trillion U.S. company, Apple (NASDAQ: AAPL) has analysts constantly upgrading the stock and upping their price targets as they try to keep up with the company’s incredible performance. The company’s stock price is up over 69% this year, no doubt thanks to the pandemic driving iPad and Mac sales for people staying at home. In the company’s Q3, Apple beat consensus revenue by 14% at over $59.6 billion thanks to its substantial increase in sales:
|% Sales Increase Since Last Year||2%||31%||17%||18%|
The company’s stock will be splitting on August 31 and if its past history is any indicator, you can expect the price to go up at least 10% in the year that follows.
Finally, we come to the company that has kept most people sane during the pandemic, the number one paid OTT service in the U.S. — Netflix (NASDAQ: NFLX). The company has over 182 million subscribers, gaining over 16 million during the pandemic; little wonder as it offers over 3,700 movies and over 1,900 television shows, enough to keep anyone occupied during the ongoing chaos. The company will invest upwards of $16 billion this year on original programming and is a proper studio as well, earning accolades from the American Academy of Motion Pictures Arts and Sciences; in fact, it has won 8 Oscars in the last 3 years, the most of any OTT. Netflix’s stock price is up over 66% this year so far.
MyWallSt operates a full disclosure policy. MyWallSt staff currently hold long positions in companies mentioned above. Read our full disclosure policy here.