If you are living at the earth, you might have seen around you that it’s getting downright ugly out there.
As the world reels from the outbreak of coronavirus, the financial markets are following actions. Each of the major U.S. stock market indexes has plunged into a bear market, down more than 25% since beginning the descent in mid-February.
While it’s certainly no fun to see a portfolio awash in red ink, it’s important to remember the sage words of investing legend Warren Buffett, who has advised investors exactly how to profit from situations such as these:
“Even as the market tanks, opportunities remain. With that in mind, let’s look at three stocks that have robust prospects in the coming years, once the coronavirus pandemic has run its course.”
Stocks that will be coronavirus resistant, and the market is ready to cash in.
Microsoft is well equipped to beat the coronavirus-induced recession fears as the business heavily relies on the robust adoption of the Azure cloud platform. Moreover, work from the home surge is expected to bolster the adoption of its enterprise communication offerings, including Teams. This, in turn, will provide its competitive edge in the enterprise communication market against Slack and Zoom. This stock is also expected to gain from a growing user base of different applications like Office 365 commercial, Dynamics, and Outlook mobile.
Microsoft’s last quarter earnings thrashed the analysts’ expectations and racked up the revenue of more than $35 billion. The company has been outspoken about how cloud business is the critical factor behind this massive revenue number. Since then, Microsoft had the necessary momentum, and in the crisis time, their service usage is going way up.
Microsoft’s market cap is $1.115 trillion, and the dividend yield is 1.39%.
During the past month’s extreme market volatility, Amazon has been a relatively safe haven.
Even with the economy almost certainly headed into recession and unemployment projected to spike, consumers are flocking to Amazon to buy essential health and household products while getting groceries delivered through services like Amazon Fresh. Last week, Amazon said that it’s hiring an additional 100,000 full-time and part-time employees in the U.S. for warehouse and delivery jobs to meet the surge in demand from online shopping amid the coronavirus outbreak, and is increasing pay and offering more lenient sick leave policies to keep workers engaged.
Additionally, businesses forced into remote work situations are more reliant than ever on the tech infrastructure provided by Amazon Web Services. Suddenly popular work-from-home apps like Slack and Zoom rely at least partially on AWS to keep their services running.
Amazon’s stock will be more likely to rise and provide better profits than other tech giant’s shares due to the sudden rise in accessing IT resources by complying with social distancing.
Amazon’s market cap is more than $973.46 billion, and the dividend yield is 0%.
Intel is benefiting from its data-centric focus. Strong adoption of its second-gen Xeon scalable processors and substantial demand from cloud service providers is expected to drive data-centric business revenues. Intel is planning nine product releases on 10 nm this year. Moreover, it is adding 25% wafer capacity across its 14 nm and 10 nm nodes in 2020. The company has already experienced backlashes from the leading cloud providers by opting for other processors. Intel looks forward to providing the hardware that meets the security requirements and processing power that end-users crave for. The present crisis time might not bring all the glory to the company shares, but after this, there are bright sunny days for Intel. Why? The current situation
The company has a market cap of $214.19 billion and a dividend yield of 2.64%.
SAP SE (SAP)
SAP SE gains traction from the robust adoption of S/4HANA, C/4HANA, Fieldglass, Concur, and SuccessFactors Employee Central solutions. The company’s alliances with Microsoft, Accenture, and Verizon favor business prospects. It is harnessing the power of ML to enhance enterprise applications. This, in turn, is enabling the company to bolster the adoption of its solutions and provide clientele with data-driven business insights. Moreover, with SAP Machine Learning and SAP Leonardo Machine
Learning to its credit offers platforms that aid enterprises and users in developing robust ML tools in the cloud.
The company has a market cap of $122.89 billion and a dividend yield of 1.17%.
Cloud infrastructure supporting applications to survive the time of crisis
Zoom Video: A work-from-home enabler
One of the most significant developments in the past two weeks has been the tendency for companies to ask their employees to stay at home. Many of the biggest names in technology advised staff last week – especially those in the areas hardest hit by the outbreak – to work from home, if possible.
Zoom Video Communications is positioned to be one of the biggest beneficiaries of this trend. Last week, the company posted revenue that grew 78% year-over-year, while customer count grew 61% in the fourth quarter. Even more impressive, the number of customers who have contributed more than $ 100,000 in revenue in the past 12 months has grown even more rapidly, reaching 86% compared to the previous year. It is important to note that the quarter ended on January 31, 2020, even before the coronavirus epidemic accelerated worldwide.
The outbreak put video conferencing in the spotlight, and as founder and CEO Eric Yuan said in the fourth-quarter conference call, “overnight, almost everyone really [understood] that they needed a tool like this.”
Zoom expects its stellar growth to continue. In the first quarter, the company is forecasting revenue growth of 64% year over year, and non-GAAP net income almost tripled. Given its history of conservative orientation, the results could be even better.
The tech stocks will disrupt the post-pandemic era.
Coronavirus outbreak will change the post-pandemic era not only in terms of the stock market but how we consume technology. Cloud will be at the front to lead the parade of technologies, that is for sure. The stocks will take time to get out of this plunged phase. The economic slowdown will not be specific to a country; it will be a global phenomenon. Microsoft, Amazon, Intel, SAP and, the video enabler, Zoom, which heavily relies on cloud, will take the stock market by storm.