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COVID-19 Market – 4 Sectors (And A Few Stocks) That Are Winning During The Pandemic

The COVID-19 pandemic has impacted all aspects of our lives as we are in the process of embracing a new normal now. The way we travel, get entertainment or get connected has all gone for a 180-degree change in recent few months. On the other side of the pandemic, we will find new trends emerging, which will dramatically change things. This includes our health, how we communicate, how we consume entertainment, or our shopping and dining habits.

Below are some of the sectors which has done exceptionally well in recent months as the pandemic has spread its tentacles.

Technology for Communication:

In a previous post, we mentioned how technology has been booming since COVID-19. Work from home is here to stay long after the pandemic is gone. Many companies have already made it clear that some of their staff are never going to come back to the office, and they would continue to work from home after the pandemic. Employees are going to be physically away from each other but will connect virtually. Technology companies that help in this connectivity are going to do well in the future. Many companies have introduced new communicator products or enhanced their existing products. Microsoft Teams, Slack, and Zoom are some of the products which have seen exponential increase in user base.

Zoom which is now synonymous with virtual meetings, has witnessed lot of buying interest from the investors, and the share price has more than doubled in less than 6 months. When most  stocks reached their all-time low in last 6 months, Zoom achieved newer highs almost every day.

Zoom stock chart during COVID-19 pandemic

E Commerce Retailers:

With COVID-19 taking a toll on the social gatherings, brick and mortar retail has been impacted to the hilt. Online is booming and along with it, the ecommerce has been booming as well. The adoption rate in the United States has grown tremendously and people have embraced using ecommerce at a much more aggressive pace than before. Across the age group, people have accepted ecommerce as a necessity. This creates exponential growth and while it will pull back a bit after quarantines, it will continue to rise in the post-COVID-19 world.

Almost all the retailers in United States have their internet presence, whether it’s Target, Walmart or Bestbuy or any small retail store in the suburbs. One stock that has witnessed the most dramatic success during this pandemic is Amazon, which has almost doubled in last 6 months. Also, the share price of Amazon did not drop as significantly as other stocks in the stock market. The way it weathered the storm and retaliated has been truly phenomenal.

Amazon stock chart during COVID-19 pandemic

OTT Products:

With the pandemic preventing the social gathering, movie theatres are the obvious casualties in this COVID-19 era. There are other modes of entertainment also which has been impacted as well, whether it’s theme parks or trampolines most of these places have been impacted as the social gathering has been restricted all across the United States. Also, the traditional medium of Television has been outdated for the new age consumers who want to consume the content based on their taste and their demand. OTT (Over the Top) platforms have been able to successfully bridge this gap of entertainment lacuna and have witnessed enough demand from consumers.

The stock market has also rewarded the OTT stocks in this pandemic era. Companies which have focused on the consumer demand in providing the on-demand entertainment have successfully able to reap the benefits. Netflix is one such company which has benefited a lot. As the pandemic became more prevalent Netflix shares gained momentum and reached new highs. The stock has just blinked a bit for few days during the month of March and continued the uptrend for almost the entire last 1 year. As the pandemic encourages more social distancing and people to stay at home the demand for stocks like Netflix is just going to go towards the North.

Netflix stock chart during COVID-19 pandemic

Digital and Internet Economy:

The benefits of not relying on humans have never been more evident than during this pandemic. Hence companies who have been successfully able to automate the operations are going to be the winners coming out of this pandemic. Before COVID-19, the rationale behind leveraging artificial intelligence (AI) was primarily to get rid of the rising wage concerns and a lack of available workers. But it is more important in the current situation to impose automation and introduce IoT to ensure the operations are not impacted because of any such pandemic in the future. Also, the profitability and continuity of the business are going to remain intact.

When it comes to digitalization and introducing automation, one company that comes to the forefront is Tesla. Not only it’s a futuristic company which is going to change the way we commute from one place to another, it’s a company which has a completely different way of operating by introducing lots of robotics and automation. During this pandemic, Tesla stock has almost moved up 3 times in a matter of 6 months. As it continues to focus on automation and relies less on human power, this is going to come out as a winner from this pandemic and investors are going to keep this stock in their portfolio.

Tesla stock chart during COVID-19 pandemic

Which of these sectors you like the most and do you think would be the unequivocal winner?

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