On every continent, the COVID-19 pandemic has affected industries and markets. Starting from China in December 2019, the disruptions spread with lockdown regulations across the globe.
The travel and tourism industries received a huge blow and as business shuttered across the countries, markets fell. Food services and energy were also severely affected. In the US, the stock market fell more than 30% in March 2020 after having a record high in February.
The U.S. Federal Reserve intervened quickly and injected more cash into the economy by lowering interest rates. The federal government also introduced a stimulus package for businesses and individuals.
On the other hand, several opportunities also arose, and some companies began showing unprecedented growth.
Big tech companies are driving the S&P 500 with stocks in certain industries flourishing. These started to do so during the pandemic as consumers and businesses spent more in some sectors than in others.
These are the 5 markets that are currently thriving the most, and appear set to stay strong going forward.
Remote work and communication
Safety concerns during the pandemic forced many businesses to allow employees to work remotely. Remote work requires specialized technology to ensure better communication and security.
One of the biggest winners is Zoom (ZM) a company that had already seen a rise in its stock before the onset of the pandemic. Zoom’s active users shot up from 10 million users at the end of 2019 to more than 300 million at the beginning of May.
When Zoom went public in April 2019, it was worth $16 billion and just this past week Zoom’s shares soared 41%, taking it to the market cap of $129 billion.
Zoom is not the only remote communication stock that’s doing well right now. The business messaging platform Slack Technologies and the telemedicine and virtual health care company Teladoc Health have also seen a rise in demand and the prices of their stocks.
Online retail stores
Store closures and consumer fears drove the market for online retailers. Amazon, the retail giant, has successfully filled the massive demand for online deliveries and was able to keep its operations running.
There has also been an increased demand for its cloud-based Amazon Web Services. Another big retailer that capitalized on the increased demand for eCommerce was Walmart.
Both Amazon and Walmart also amped up their hiring during the pandemic to accommodate the increased demand for grocery items, toiletries, etc.
Facebook also offered a lifeline to small businesses with the launch of Shops, helping many small businesses get into eCommerce.
Home entertainment and social communication
Digital content that is relevant and allows people to entertain themselves at home has also seen a huge increase in demand. Streaming services like Netflix and Spotify increased their subscribers and the demand for their services continues to grow.
Netflix’s extension for Google Chrome was also announced recently, and people can organize to watch movies with their friends remotely.
People across the world need to keep in touch with family and friends. Social distancing requires that even people living near each other need to use social media to communicate. Apps like Facebook, Twitter, Snapchat, etc. have seen increased usage over this period and have surpassed their estimates for Q1 revenues.
Gaming
In April, gaming saw a surge of 70% during peak hours in the U.S. The money spent on gaming software grew 34% and listed companies gained 10% compared to the overall decline of 14% on the S&P 500 for that month.
Gaming demand is expected to continue to increase as Sony and Microsoft are about to release their new console arrivals later this year.
The video game companies that have benefited from the growing trend in the industry are Activision Blizzard, the producer of the popular video game Call of Duty, Electronic Arts, Take Two Interactive Software, and Zynga.
Pharmaceuticals and biomedicals
The race to develop a vaccine for COVID-19 is on, and biomedical stocks on the Biomedical Index have grown by 321.87% since the beginning of 2020. The index includes the stocks of Gilead Sciences, Moderna, GlaxoSmithKline, Johnson & Johnson, etc.
Moderna is busy developing a vaccine with promising results and received $483 federal funds earlier this year. Gilead is the manufacturer of remdesivir, the antiviral drug developed to treat Ebola, which is used to treat hospitalized COVID-19 patients.
Besides the vaccine, pharmaceutical companies have also met the huge increase in demand for protective gear, respirators, and the development of testing kits for the virus. This has often required the repurposing of products developed for other epidemics like HIV and Ebola.
All that remains to be seen is if these trends are only temporary or if this new consumer behavior will continue long-term.
