The coronavirus pandemic upended office life but the virtual work environment, AKA our homes, was a boon for work-from-home stocks. As we try to find a “new normal” amid a crisis, technology plays a key role in helping us stay connected during these unprecedented times.
The surge in demand for connectivity tools led many companies in the industry to all-time highs – some have even seen shares triple in the last few months. While critics say this demand is short-lived and will die down once things go back to normal, others believe that the work-from-home trend is here to stay.
Companies like Facebook (NASDAQ:FB) and Mondelez International (NASDAQ:MDLZ) made working from home a permanent option. This will help bring down fixed costs and provide access to a larger talent pool. Regardless of what the future holds, the pandemic will permanently alter elements of work life.
Here are three work-from-home stocks that are well-poised to benefit from this trend:
Work-From-Home Stocks: Zoom (ZM)
One of the companies that many see as the face of the work-from-home trend is Zoom. The coronavirus pandemic led many people to find new ways to remain social through virtual happy hours, game nights and parties. The video-conferencing app Zoom was the ideal way to do this.
The company experienced a meteoric rise in just a few short months with app downloads up 30x year-over-year. Zoom currently boasts more than 200 million daily users and controls 43% of the U.S video-conferencing market. The stock quickly became a favorite in the volatile pandemic economy.
Zoom’s key differentiator lies in its cloud technology and low-cost. The video-conferencing tool allows up to 100 participants, making it the perfect option for virtual meetings, both big and small.
Riding on its pandemic highs, the company’s stock experienced a second surge after shares grew 47% on Sept. 1. This comes after management’s optimistic revenue projections. The company believes it will generate revenue of $2.37 billion for the fiscal year 2020, topping its earlier estimate of $1.78 billion.
Although Zoom faces scrutiny for security concerns, the company’s strong presence in the virtual environment makes this work-from-home stock a great buy.
Apple has always been a household name in the tech space but the company doubled down on innovation during the pandemic. In addition to working from home, many people also had to find new ways to stay fit. Fitness companies experienced massive growth from the virtual workouts and Apple wanted in on the trend.
In its most recent product launch event, Apple unveiled Fitness+. The subscription service for the Apple Watch allows access a variety of workout classes hosted by one of its in-house instructors for just $9.99 a month. The classes can be done via the iPad, iPhone or Apple TV with the workout metrics tracked on your watch.
But the company didn’t stop there. Apple introduced the ultimate package deal, Apple One, which includes its top services like Apple Music, TV+, iCloud and Arcade. Basically, everything you need to make the most of your time at home. The goal is to keep users in the Apple ecosystem as long as possible. As remote work and play remain the norm, Apple wants the bundle to be your go-to for all things entertainment.
The new product sparked backlash from Spotify (NYSE:SPOT), which claimed Apple was using its dominant position to disadvantage competitors. There is truth to this sentiment. Apple One could boost the company’s service revenue and ultimately win the music war.
Following the marketing event that failed to feature the highly-anticipated iPhone 5G, Apple stock fell by 20%. This dip is a great buying opportunity for investors who have been holding out on this work-from-home stock. Place your bets now before the launch of its new iPhone is likely to send prices soaring.
Twitter has always been a go-to source for all things current but engagement on the app increased multifold during the pandemic. It remained one of the main ways to say socially connected while working from home. Moreover, the platform also played a key role in the dissemination of medical information during an unprecedented crisis.
Although Twitter saw a 3% revenue growth during its first quarter of 2020, this was still a far cry from the company’s 13.7% increase in the previous year. This can be attributed to low ad sales as companies cut back on advertising costs at the start of the pandemic. Nevertheless, the company has made a comeback since its Q1 lows.
More recently, Twitter addressed rumors of a subscription plan which could boost its non-ad revenue streams. While the company did not commit to a timeline, it did confirm that a project was in the works. This was enough to convince the skeptics and the stock rose to the $40s.
Twitter recently did an overhaul of its ad server and is expected to roll out new features to cater to more diverse ads on its platform in the future.
Twitter shows a lot of promise for the long term. Given the tech giant’s strong track record, analysts believe this stock is poised for a greater upside in the following quarter. We recommend buying this work from home stock while prices remain low.
On the date of publication, Divya Premkumar did not have (either directly or indirectly) any positions in any of the securities mentioned in this article.
Divya Premkumar has a finance degree from the University of Houston, Texas. She is a financial writer and analyst who has written stories on various financial topics from investing to personal finance. Divya has been writing for InvestorPlace since 2020.