Considered a distant dream only one week ago, many European countries have begun to ease some of their more severe COVID-19 restrictions and outline timetables for their exit strategies.
In the meantime, a slowdown in new cases has made Wall Street more optimistic about reopening the economy.
The beauty of the stock market is that it provides a view of what investors expect for the future. It’s likely that many stocks will rise once the worst of the COVID-19 pandemic is behind us. Some stocks, however, may do even better.
As Wall Street is starting to pick through winners and losers, here are three stocks to watch in a post COVID-19 world.
In 2020, Consumers have been relying on online deliveries from shipping giant Amazon more than ever, which has seen its shares rise more than 25% this year.
Yes, Amazon was already a king among e-commerce kings well before the coronavirus outbreak. But in light of the new world order, Amazon might become even more of a must-have for consumers in the future than it’s been in the past.
Use of Amazon Prime, a subscription service that gives members access to a variety of Amazon perks, is more widespread today than ever before. The service provides free shipping in addition to an enormous library of streaming movies and music with Amazon Prime Video. While so many people have been cooped up at home in recent months, it’s a safe bet that Prime subscriptions have jumped. Moreover, once customers join Prime, they also begin buying more from Amazon.
Even if customers prefer to return to shopping in brick-and-mortar stores once the pandemic is over, it seems Amazon is in position to continue its winning streak. Amazon recently unveiled its “Just Walk Out” service which enables shoppers to simply enter a store, grab what they want, and leave without having to check out with a cashier.
Additionally, Amazon’s business model of dominating multiple paths to generate growth, most notably its huge array of cloud services, is impressive. According to Wall Street, Amazon still has much room for much upside, making its stock a favourite amongst analysts.
In the short term, Wall Street analysts are signalling to be prepared for a tumble in Alphabet’s profits as businesses around the world have heavily cut back on advertising spending. Considering that the Google parent company makes over 80% of its revenue from online ads, this caution seems sensible.
However, companies won’t curtail their marketing budgets forever. Once the global economy gets back on track, businesses too will continue to spend on advertising to convince consumers things are safe again and to prod them back through the doors. Google, YouTube and Alphabet’s other apps and websites rank among the best ways to target potential customers.
More of Alphabet’s businesses stand to benefit as a result of the COVID-19 pandemic. Companies came to realise now, more than ever, the importance of maintaining robust online operations. This should fuel greater demand for Alphabet’s already fast-growing Google Cloud unit. During the COVID-19 outbreak alone, the company’s G Suite productivity tools, a central part of its Google Cloud business, added 1 million new customers worldwide.
Boasting two things that every investor should like -a solid moat that protects it from losing market share and multiple paths to generate growth, many consider Alphabet an attractive option for forward-thinking investors.
Like Amazon, Walmart too has been a strong performer during this crisis. While most retailers have been forced to close their doors, Walmart reportedly saw its sales jump 20% year-over-year for most of March.
And it’s not surprising. Americans on lockdown are eating more at home. Electronics, toys, cleaning supplies and just about everything else Walmart sells is also in high demand these days. Fortunately for Walmart, the retail giant had built its e-commerce arm long before the crisis.
Yes, one can only stockpile so much bleach and toilet paper. But even if the coronavirus crises had been a rare windfall, Walmart still stands to benefit for years or even decades after the lockdowns are lifted. The company is well-positioned to capitalise on the growth of e-commerce—particularly the increase in online grocery shopping. On top of that, being the king of low-price shopping, Walmart is perhaps one of the best stocks to buy in light of an increase in consumer price sensitivity amidst a recession.