The 2020 holiday shopping season is in full effect. We may still be in the midst of a pandemic, but that doesn’t mean consumers are tightening their belts. On the contrary, they are in a buying mood.
They are also shifting much of their sales online, continuing a trend we’ve seen throughout 2020. That’s good news for many tech stocks, including the seven I’ve spiked out. These companies are in line to see either a big holiday boost in sales of their products, or a surge in sales using their services. In one case, it with be both!
Here are 7 tech stocks to buy for a very happy holiday:
- Apple (NASDAQ:AAPL)
- Amazon (NASDAQ:AMZN)
- Etsy (NASDAQ:ETSY)
- Shopify (NYSE:SHOP)
- PayPal (NASDAQ:PYPL)
- Roku (NASDAQ:ROKU)
- Turtle Beach (NASDAQ:HEAR)
The challenge may come in delivering all these online gifts. In the aftermath of last week’s Cyber Monday sales, some couriers began imposing pickup volume limits on retailers. However, that’s for the USPS and delivery companies to worry about. The companies on my list will be delivering holiday quarters that make shareholders very merry indeed.
You can’t have a serious conversation about tech stocks without AAPL stock, at any time. But this holiday season? I think Apple is going to have a killer quarter.
The company went into December with one of its strongest product mixes ever. There’s the iPhone series 12, the first iPhone with 5G. And the company can’t keep up with demand for MacBooks and Mac mini powered by the company’s revolutionary new M1 processor.
In addition, Apple is openly courting more price-conscious consumers this year. For the first time, there is a lower-cost SE version of the latest Apple Watch. Finally, the company released a $99 HomePod mini smart speaker — and it promptly sold out on launch day.
Throw the wildy popular AirPods in the mix, along with the most robust selection of accessories in the business (MagSafe wireless chargers, iPhone cases, Apple Watch straps, and more), and Apple is in a great position to benefit from holiday shopping.
And I’m not the only one who thinks AAPL stock is soon going to break out of its three-month slump. Based largely on AirPods holiday sale projections and stellar iPhone 12 sales performance, Apple was recently on the receiving end of multiple analyst upgrades.
It should be obvious how I feel about Amazon. This is a stock with straight “A” ratings in Portfolio Grader. AMZN stock is also one I alluded would benefit from both a surge in its services and boosted sales of its own products.
The holiday sales quarter is traditionally Amazon’s biggest. And this year it will be super-charged. Not only is online shopping seeing unprecedented popularity, but because of the pandemic, Amazon’s Prime Day event was pushed to the holiday quarter.
Prime Day 2020, Black Friday and Cyber Monday have all been confirmed as the strongest in company history. Amazon is also seeing huge demand for its own products, with the Echo Dot smart speaker and Fire TV Stick 4K among the top sellers during the big holiday sales events.
AMZN stock has seen growth of 67% this year. With the strength of a holiday quarter that’s producing record sales numbers and more Amazon hardware than ever going out the door, expect that trend to continue.
AMZN has struggled to recover from the September tech stocks selloff, but that just makes it an even more tempting target before its holiday quarter earnings are reported.
Etsy is another company in a great position to benefit from this year’s online Christmas shopping surge. The company’s small retailers and craftspeople were there early in the pandemic, able to pivot to selling cloth masks when traditional stores were sold out.
More than 100,000 Etsy vendors started selling masks at the start of the pandemic. Between May and June, $346 million worth of cloth masks were purchased by Etsy shoppers. So it’s probably not surprising that ESTY stock is on fire this year, up 253% so far.
I don’t think it’s going to run out of gas any time soon. Once shoppers have an Etsy account, they’re going to return to shop there again — creating an account is always one of the biggest barriers to online shopping. And with so many handmade items, Etsy is going to be taking the place of traditional Christmas craft shows that have been cancelled because of the pandemic.
Etsy’s CEO told CNBC that “personalized gifts” is currently the most-searched term on the site. This suggests consumers are hunting for something besides the mass-market goods you’ll find on Amazon.
That’s more good news for anyone who owns ETSY stock.
Shopify is having a year for the books, with SHOP stock posting growth that’s more than double Amazon’s, at 158% so far in 2020.
The Canadian e-commerce company was perfectly positioned for the pandemic. Amazon offers Amazon Marketplace for third party vendors, but they get essentially absorbed under the Amazon umbrella. Shopify offers turnkey solutions that let small businesses get online easily and inexpensively, while still retaining their own identity. Consumers don’t go to Shopify to shop online, they find their favorite local business and shop on its website powered by Shopify.
Shopify’s solution was ideal for all the small businesses that had to close their doors during the pandemic lockdown and scramble to get online. Now that they’re online, these companies will stay online. Shopify even offers solutions to integrate their digital and in-store operations, plus POS payment hardware.
Are SHOP stock investors going to have a merry Christmas? I’d say so. The company released numbers for Black Friday/Cyber Monday that were spectacular. Shopify merchants sold $5.1 billion worth of goods, obliterating the record-setting $2.9 billion in sales over the same weekend in 2019.
Why is PYPL stock up 97% in 2020? You guessed it — the pandemic. PayPal is one of those tech stocks that spent years growing services that just happened to be perfect for our socially-distanced reality.
When people shop online, they don’t always want to directly use their credit card. PayPal adds an additional level of security by letting shoppers buy without giving a retailer their credit card info. With the pandemic triggering a surge in online shopping, on May 1, PayPal recorded its largest transaction volume ever — eclipsing even the previous year’s Black Friday volume. Those shoppers are out in full force, looking for Christmas gifts.
The company is adding millions of new users. They can also pay in stores using PayPal to avoid that other pandemic bugaboo — cash. PayPal’s cashless money service Venmo is also seeing huge growth this year. In its latest quarter, PayPal reported Venmo payment volume of $44.1 billion, a 61% year-over-year increase.
For PayPal investors, the kickstarted move from cash to digital payment will be the gift that keeps giving.
Count Roku among those tech stocks that benefited from the coronavirus pandemic lockdowns. With so many movie theaters closed, streaming video has become one of the most popular ways to pass time. While the majority of new TVs sold today are “smart” versions that have some sort of streaming capability built in, there are millions of older TVs out there that lack this feature.
Roku is a player on the smart TV front. Many new televisions (especially those from Chinese brands like TCL and Hisense) come with built-in Roku functionality. Naturally, Roku collects a licensing fee. However, Roku also sells the most popular lineup of plug-in video streamers in the country, along with upgrades like soundbars. Expect quite a few of these Roku devices to find their way under Christmas trees this year.
Whether they use a TV with built-in ROKU capability, or buy a plug-in Roku streamer, the company gets a revenue boost. But ROKU stock keeps feeling the benefit of growing ad revenue generated by Roku’s network — a number that hit $742 million in 2019.
In the third quarter, Roku reported the pandemic boost wasn’t showing any sign of letting up. Active accounts were up 43% YoY, streaming hours were up 54%, revenue beat estimates and increased 73%, while monetized video ad impressions were up by nearly 90%.
Those results triggered yet another spike in ROKU stock in early November; it has gained an additional 27% since then.
Turtle Beach (HEAR)
You may not have heard of Turtle Beach before, but if you know a video game fan, you will.
Turtle Beach makes some of the most popular headsets for PC and console gaming. And HEAR stock has seen big gains in 2020 after an off 2019 as gaming became one of the most popular activities during lockdown, up 188% so far in 2020. Christmas shoppers are going to be the next catalyst for HEAR stock growth.
The Xbox Series X and Playstation 5 game consoles are the must-have Christmas gift for gamers in 2020. And that means a lot of parents, grandparents and siblings looking for accessories to accompany these big-ticket gifts. I’m willing to bet Turtle Beach gaming headsets are going to be high on the list.
On the date of publication, Louis Navellier had a long position in AMZN, ETSY, HEAR, SHOP, PYPL, and ROKU. Louis Navellier did not have (either directly or indirectly) any other positions in the securities mentioned in this article. InvestorPlace Research Staff member primarily responsible for this article did not hold (either directly or indirectly) any positions in the securities mentioned in this article.
Louis Navellier had an unconventional start, as a grad student who accidentally built a market-beating stock system — with returns rivaling even Warren Buffett. In his latest feat, Louis discovered the “Master Key” to profiting from the biggest tech revolution of this (or any) generation.