These are times that will try tech’s soul.
The summer app and the sunshine code will fail in this crisis. But technology that holds up and delivers productivity now deserves the love and thanks of employees and investors alike.
Over the next month Americans in unparalleled numbers are going to be working from home.
While most analysts are emphasizing the personal challenges in this, there are also tremendous investment opportunities. Companies that can keep their clients running through the outbreak could find be doing huge business after it’s over.
Most of their stocks have been battered, and now sit on bargain shelves.
Watch on the Street
Companies that deliver office applications to at-home workers are now trading for one-third less than they did before the crisis.
Microsoft and Google dominate the market for basic office tools. Database applications developed in the first decade of this century by Oracle (NYSE:ORCL), SAP (NYSE:SAP) and International Business Machines (NYSE:IBM) may prove more important.
Software-as-a-service outfits like Salesforce (NYSE:CRM), Workday (NASDAQ:WDAY), and ServiceNow (NYSE:NOW), Atlassian (NASDAQ:TEAM) and HubSpot (NYSE:HUBS) deliver this technology in the form of apps. These can handle relations with customers, corporate resources and people. Other companies like Adobe (NASDAQ:ADBE) deliver creativity tools. The challenge for Adobe is getting home-office workers the same peripherals they enjoy in the office. Time to call Best Buy (NYSE:BBY).
Working From Home
One of the most important technologies comes from Zoom Communications (NASDAQ:ZM), in the form of videoconferencing. Zoom stock is one of the rare issues that are up on the year. Slack Technologies (NYSE:WORK) is proving its worth in text conferencing. Slack is down for the year. It compete with units of Microsoft, Cisco Systems (NASDAQ:CSCO) and Google in conferencing.
This period may be even more important to AT&T (NYSE:T), Comcast (NASDAQ:CMCSA) and CenturyLink (NYSE:CTL). They must keep the last mile of the link between clouds and customers open. The first two cut capital budgets to pay for entertainment companies. CenturyLink has been prioritizing dividends. Its yield March 13 was 10.8%. That is not a typo.
The most talked about company is Amazon (NASDAQ:AMZN). Its Amazon Web Services cloud hosts most of the applications. Prime Video is going to entertain a lot of people stuck at home. The company’s e-commerce unit can deliver products for those who can’t get out. Those shares are down 27% from their highs but just 10% for the year so far.
You also need to watch the real estate investment trusts (REITs). The biggest office REITs, like Boston Properties (NYSE:BXP), are down as much as 18% for the year. Data center REITs, like Digital Realty (NYSE:DLR), are up 8%. This may be the start of a bigger move.
The Bottom Line on Tech Stocks
Personally, I want to welcome you all to my world. I have been working at home since 1983. I started with a Kaypro and a 300-baud modem.
Make sure you have a clear, quiet space, with Wi-Fi. Some coffee and rolls would be nice. Walk around every hour so you don’t stiffen up. Work the same hours you do at the office and enjoy the extra time you don’t waste getting there.
On the weekends, make sure you get out among people, and check in at the office every so often for all-hands meetings.
You may never want to go back. Your portfolio, coming out of this crisis, might want to reflect that with some of the above tech stocks.
Dana Blankenhorn has been a financial and technology journalist since 1978. His latest book is Technology’s Big Bang: Yesterday, Today and Tomorrow with Moore’s Law, essays on technology available at the Amazon Kindle store. Follow him on Twitter at @danablankenhorn. As of this writing he owned shares in MSFT, AMZN and DLR.